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114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-735
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STRENGTHENING PUBLIC HEALTH EMERGENCY RESPONSE ACT OF 2016
_______
September 9, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Upton, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 3299]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 3299) to amend the Public Health Service Act to
ensure preparedness for chemical, radiological, biological, and
nuclear threats, and for other purposes, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 7
Background and Need for Legislation.............................. 7
Hearings......................................................... 8
Committee Consideration.......................................... 8
Committee Votes.................................................. 8
Committee Oversight Findings..................................... 12
Statement of General Performance Goals and Objectives............ 12
New Budget Authority, Entitlement Authority, and Tax Expenditures 12
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 12
Committee Cost Estimate.......................................... 12
Congressional Budget Office Estimate............................. 12
Federal Mandates Statement....................................... 14
Duplication of Federal Programs.................................. 15
Disclosure of Directed Rule Makings.............................. 15
Advisory Committee Statement..................................... 15
Applicability to Legislative Branch.............................. 15
Section-by-Section Analysis of the Legislation................... 15
Changes in Existing Law Made by the Bill, as Reported............ 16
Dissenting Views................................................. 47
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Strengthening Public
Health Emergency Response Act of 2016''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. GAO report on State, local, and hospital preparedness programs.
Sec. 3. Strategic national stockpile.
Sec. 4. Project Bioshield procurement process.
Sec. 5. BARDA transaction authorities.
Sec. 6. Public health emergency medical countermeasures enterprise
strategy and implementation plan.
Sec. 7. Priority review to encourage treatments for agents that present
national security threats.
SEC. 2. GAO REPORT ON STATE, LOCAL, AND HOSPITAL PREPAREDNESS PROGRAMS.
(a) In General.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General of the United States shall submit a
report to the Congress on the programs for awarding cooperative
agreements and grants under section 319C-1 of the Public Health Service
Act (42 U.S.C. 247d-3a; improving State and local public health
security) and section 319C-2 of such Act (42 U.S.C. 247d-3b;
partnerships for State and regional hospital preparedness to improve
surge capacity).
(b) Contents.--The report under subsection (a) shall address each of
the following:
(1) The goals of the programs specified in subsection (a).
(2) The extent to which such goals are being met, including
performance metrics that could help to assess whether such
programs are succeeding at the coalition and member level.
(3) How such programs could be improved, including how such
programs could be modified to improve the medical preparedness
of hospitals, health care coalitions, and the continuity of
health care delivery.
(4) How such programs complement other preparedness programs
of the Department of Health and Human Services.
(5) How funds awarded through such programs should be
allocated and whether that allocation should be based on risk.
(6) Progress made toward State and local preparedness
entities being self-sustaining.
(7) Whether the level of funding for such programs is
sufficient.
(8) How funding for such programs is being used to ensure
preparedness for at-risk populations including children,
pregnant women, senior citizens, and other individuals who may
have unique needs in the event of a public health emergency,
such as individuals with disabilities.
(9)(A) How, and to what extent, entities are using the funds
awarded to such entities through section 319C-2 of the Public
Health Service Act (42 U.S.C. 247d-3b) to directly fund
regional health care coalitions and members of such coalitions.
(B) The amount each such entity retains for its own indirect
and direct costs.
(C) The purposes for which such retained funds are used and
whether these uses provide value for the program under such
section 319C-2, regional health care coalitions, and members of
such coalitions.
(10) The extent to which the funds awarded through the
programs under sections 319C-1 and 319C-2 of the Public Health
Service Act (42 U.S.C. 247d-3a, 247d-3b) have been used for
overlapping purposes.
SEC. 3. STRATEGIC NATIONAL STOCKPILE.
Section 319F-2(a)(2) of the Public Health Service Act (42 U.S.C.
247d-6b(a)(2)) is amended--
(1) in subparagraph (G), by striking ``and'' at the end;
(2) in subparagraph (H), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following:
``(I) ensure procedures are in place to coordinate
the ongoing stockpiling by the Biomedical Advanced
Research and Development Authority and Centers for
Disease Control and Prevention of qualified
countermeasures (as defined in section 319F-1) for
which funds have been made available under this part,
security countermeasures (as defined in this section),
and qualified pandemic or epidemic products (as defined
in section 319F-3) for which funds have been made
available under section 319L in order to avoid any gaps
in preparedness.''.
SEC. 4. PROJECT BIOSHIELD PROCUREMENT PROCESS.
Section 319F-2(c) of the Public Health Service Act (42 U.S.C. 247d-
6b(c)) is amended--
(1) in paragraph (4)(A)(ii), by striking ``make a
recommendation under paragraph (6) that the special reserve
fund as defined in subsection (h) be made available for the
procurement of such countermeasure'' and inserting ``make
available the special reserve fund as defined in subsection (h)
for procurement of such countermeasure'';
(2) in paragraph (6)--
(A) by striking subparagraphs (A), (B), (C), and (E);
and
(B) by striking ``(6) Recommendations for president's
approval'' and all that follows through ``(D)
Subsequent specific countermeasures.--'' and inserting
``(6) Subsequent specific countermeasures.--''; and
(3) in paragraph (7)--
(A) by striking subparagraph (A);
(B) by redesignating subparagraph (B) as subparagraph
(A) and amending such subparagraph (A), as
redesignated, to read as follows:
``(A) Payments from special reserve fund.--The
special reserve fund as defined in subsection (h) shall
be available for payments made by the Secretary to a
vendor for procurement of a security countermeasure in
accordance with the provisions of this paragraph.'';
and
(C) by redesignating subparagraph (C) as subparagraph
(B).
SEC. 5. BARDA TRANSACTION AUTHORITIES.
Section 319L(c)(5) of the Public Health Service Act (42 U.S.C. 247d-
7e(c)(5)) is amended by adding at the end the following:
``(H) Contracting authority clarification.--The
Secretary shall delegate authority for negotiating and
entering into any contracts, grants, or cooperative
agreements under this section to the Director.''.
SEC. 6. PUBLIC HEALTH EMERGENCY MEDICAL COUNTERMEASURES ENTERPRISE
STRATEGY AND IMPLEMENTATION PLAN.
Section 2811(d)(2) of the Public Health Service Act (42 U.S.C. 300hh-
10(d)(2)) is amended--
(1) in subparagraph (A), by inserting after ``describe the
chemical, biological, radiological, and nuclear agent or agents
that may present a threat to the Nation'' the following:
``(which shall include pandemic influenza)'';
(2) by striking ``and'' at the end of subparagraph (J);
(3) by redesignating subparagraph (K) as subparagraph (L);
and
(4) by inserting after subparagraph (J) the following:
``(K) report on the amount of time between the
issuance of each request for a proposal or task order
from the Biomedical Advanced Research and Development
Authority and the award of a contract pursuant to such
request for a proposal or task order; and''.
SEC. 7. PRIORITY REVIEW TO ENCOURAGE TREATMENTS FOR AGENTS THAT PRESENT
NATIONAL SECURITY THREATS.
(a) In General.--Subchapter E of chapter V of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 360bbb et seq.) is amended by inserting
after section 565 the following:
``SEC. 565A. PRIORITY REVIEW TO ENCOURAGE TREATMENTS FOR AGENTS THAT
PRESENT NATIONAL SECURITY THREATS.
``(a) Definitions.--In this section:
``(1) Priority review.--The term `priority review', with
respect to a human drug application as defined in section
735(1), means review and action by the Secretary on such
application not later than 6 months after receipt by the
Secretary of such application, as described in the manual of
policies and procedures of the Food and Drug Administration and
goals identified in the letters described in section 101(b) of
the Food and Drug Administration Safety and Innovation Act
(Public Law 112-144).
``(2) Priority review voucher.--The term `priority review
voucher' means a voucher issued by the Secretary to the sponsor
of a material threat medical countermeasure application that
entitles the holder of such voucher to priority review of a
single human drug application submitted under section 505(b)(1)
of this Act or section 351(a) of the Public Health Service Act
after the date of approval of the material threat medical
countermeasure application.
``(3) Material threat medical countermeasure application.--
The term `material threat medical countermeasure application'
means an application that--
``(A) is a human drug application as defined in
section 735(1) to prevent, or treat harm from, a
biological, chemical, radiological, or nuclear agent
identified as a material threat under section 319F-
2(c)(2)(A)(ii) of the Public Health Service Act;
``(B) the Secretary deems eligible for priority
review;
``(C) is approved after the date of enactment of the
Strengthening Public Health Emergency Response Act of
2016; and
``(D) is for a human drug, no active ingredient
(including any ester or salt of the active ingredient)
of which has been approved pursuant to any other
application under section 505(b)(1) of this Act or
section 351(a) of the Public Health Service Act.
``(b) Priority Review Voucher.--
``(1) In general.--The Secretary shall award a priority
review voucher to the sponsor of a material threat medical
countermeasure application upon approval by the Secretary of
such application.
``(2) Transferability.--
``(A) In general.--The sponsor of a material threat
medical countermeasure application that receives a
priority review voucher under this section may transfer
(including by sale) the entitlement to such voucher to
a sponsor of a human drug for which an application
under section 505(b)(1) of this Act or section 351(a)
of the Public Health Service Act will be submitted
after the date of the approval of the material threat
medical countermeasure application. There is no limit
on the number of times a priority review voucher may be
transferred before such voucher is used.
``(B) Notification of transfer.--Each person to whom
a voucher is transferred shall notify the Secretary of
such change in ownership of the voucher not later than
30 days after the date of such transfer.
``(3) Notification.--
``(A) In general.--The sponsor of a human drug
application shall notify the Secretary not later than
90 calendar days prior to submission of the human drug
application that is the subject of a priority review
voucher of an intent to submit the human drug
application, including the date on which the sponsor
intends to submit the application. Such notification
shall be a legally binding commitment to pay for the
user fee to be assessed in accordance with this
section.
``(B) Transfer after notice.--The sponsor of a human
drug application that provides notification of the
intent of such sponsor to use the voucher for the human
drug application under subparagraph (A) may transfer
the voucher after such notification is provided, if
such sponsor has not yet submitted the human drug
application described in the notification.
``(c) Priority Review User Fee.--
``(1) In general.--The Secretary shall establish a user fee
program under which a sponsor of a human drug application that
is the subject of a priority review voucher shall pay to the
Secretary a fee determined under paragraph (2). Such fee shall
be in addition to any fee required to be submitted by the
sponsor under chapter VII.
``(2) Fee amount.--The amount of the priority review user fee
shall be determined each fiscal year by the Secretary and based
on the average cost incurred by the agency in the review of a
human drug application subject to priority review in the
previous fiscal year.
``(3) Annual fee setting.--The Secretary shall establish,
before the beginning of each fiscal year beginning after
September 30, 2016, for that fiscal year, the amount of the
priority review user fee.
``(4) Payment.--
``(A) In general.--The priority review user fee
required by this subsection shall be due upon the
notification by a sponsor of the intent of such sponsor
to use the voucher, as specified in subsection
(b)(3)(A). All other user fees associated with the
human drug application shall be due as required by the
Secretary or under applicable law.
``(B) Complete application.--An application described
in subparagraph (A) for which the sponsor requests the
use of a priority review voucher shall be considered
incomplete if the fee required by this subsection and
all other applicable user fees are not paid in
accordance with the Secretary's procedures for paying
such fees.
``(C) No waivers, exemptions, reductions, or
refunds.--The Secretary may not grant a waiver,
exemption, reduction, or refund of any fees due and
payable under this section.
``(5) Offsetting collections.--Fees collected pursuant to
this subsection for any fiscal year--
``(A) shall be deposited and credited as offsetting
collections to the account providing appropriations to
the Food and Drug Administration; and
``(B) shall not be collected for any fiscal year
except to the extent provided in advance in
appropriation Acts.
``(d) Notice of Issuance of Voucher and Approval of Products Under
Voucher.--The Secretary shall publish a notice in the Federal Register
and on the public website of the Food and Drug Administration not later
than 30 calendar days after the occurrence of each of the following:
``(1) The Secretary issues a priority review voucher under
this section.
``(2) The Secretary approves a drug pursuant to an
application submitted under section 505(b) of this Act or
section 351(a) of the Public Health Service Act for which the
sponsor of the application used a priority review voucher under
this section.
``(e) Eligibility for Other Programs.--Nothing in this section
precludes a sponsor who seeks a priority review voucher under this
section from participating in any other incentive program, including
under this Act, except that no sponsor of a material threat medical
countermeasure application may receive more than one priority review
voucher issued under any section of this Act with respect to the drug
that is the subject of such application.
``(f) Relation to Other Provisions.--The provisions of this section
shall supplement, not supplant, any other provisions of this Act or the
Public Health Service Act that encourage the development of medical
countermeasures.
``(g) Medical Countermeasure Postapproval Report.--
``(1) In general.--Not later than 5 years after the date of
approval of a material threat medical countermeasure
application, the sponsor of such application shall submit a
report to the Secretary on such medical countermeasure.
``(2) Contents.--A report under paragraph (1) shall include,
with respect to each of the first 2 years after approval of
such material threat medical countermeasure application, a
description of--
``(A) the sponsor's activities with Federal agencies
related to the procurement, including stockpiling, of
the approved medical countermeasure;
``(B) the sponsor's progress in fulfilling contracts
entered into with Federal agencies, including the
Biomedical Advanced Research and Development Authority,
the Centers for Disease Control and Prevention, and the
Department of Defense, related to such procurement;
``(C) the extent to which the Federal Government has
fulfilled its stated medical countermeasure
requirements for the threat intended to be treated by
the approved medical countermeasure; and
``(D) the sponsor's plans, if any, to develop
additional material threat medical countermeasures.
``(3) Availability to congressional committees.--The
Secretary shall make each report submitted under this
subsection available to the Committee on Energy and Commerce of
the House of Representatives and the Committee on Health,
Education, Labor, and Pensions of the Senate upon request by
either such Committee not later than 30 days after receipt of
such request.
``(4) Rule of construction.--Nothing in this subsection shall
be construed to permit the disclosure of confidential
commercial or trade secret information or the disclosure of
information that could compromise national security.''.
(b) GAO Report.--
(1) Study.--The Comptroller General of the United States
shall conduct a study on the effectiveness of priority review
vouchers under section 565A of the Federal Food, Drug, and
Cosmetic Act, as added by subsection (a), in providing
incentives for the development of material threat medical
countermeasure applications under such section 565A. In
conducting such study, the Comptroller General shall examine
the following:
(A) The impact of such priority review on the
development of material threat medical countermeasures
and the impact of such investment, as applicable, on
the development of such countermeasures.
(B) How the drugs for which such priority review
vouchers were awarded--
(i) addressed identified medical
countermeasure needs; and
(ii) impacted United States preparedness
against chemical, biological, radiological, and
nuclear threats, including both identified
threats and naturally occurring threats.
(C) How many material threat medical countermeasures
were licensed or approved, or otherwise significantly
advanced in clinical development, in the 15 years
following the enactment of such section 565A compared
to the 15 years prior to the enactment of such section,
including a comparative analysis of Federal advanced
development and procurement dollars available in the 15
years following such enactment compared to the prior 15
years.
(D) How material threat medical countermeasures
developed after the date of enactment of this Act
impact--
(i) the supply of products in the strategic
national stockpile under section 319F-2 of the
Public Health Service Act (42 U.S.C. 247d-6b);
and
(ii) national preparedness.
(E) How the Federal Government supported sponsors of
material threat medical countermeasures during the
research, development, application review, and
production of such drugs, including the use of
government research, provision of resources through
contracts or grants, and use of federally funded
research facilities.
(F) An analysis of the drugs for which such priority
review vouchers were used, which shall include--
(i) the indications for which such drugs were
approved under section 505(b)(1) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C.
355(b)(1)) or section 351(a) of the Public
Health Service Act (42 U.S.C. 262(a));
(ii) whether unmet medical needs were
addressed through the approval of such drugs,
including, for each such drug--
(I) if there was a currently marketed
therapy approved to prevent or treat
the same indication in the same patient
population at the time the application
was submitted to the Food and Drug
Administration; and
(II) if the drug provided a
significant benefit or improvement in
safety and effectiveness compared to
such currently marketed product;
(iii) the price of the priority review
voucher if transferred or sold prior to
redemption; and
(iv) the length of time between the date on
which a priority review voucher was awarded and
the date on which it was used.
(G) With respect to the priority review voucher
program under such section 565A--
(i) how many priority review vouchers were
awarded under such section 565A and how many of
such awarded vouchers were redeemed for
priority review of a drug application in the 15
years following the date of enactment of such
section;
(ii) the resources associated with the Food
and Drug Administration implementation of such
section 565A and review of applications for
which a voucher awarded under such section 565A
is redeemed for priority review and if
implementation of such section 565A prohibited
the Food and Drug Administration from meeting
drug application review goals;
(iii) recommendations on whether appropriate
Federal funding for advanced development and
research would necessitate the priority review
voucher program for medical countermeasures;
(iv) the degree to which this incentive
program impacts other priority review voucher
programs; and
(v) the degree to which guaranteed Federal
funding for advanced development and research
is a greater incentive for new investment in
research and the development of medical
countermeasures than the uncertain values of
vouchers.
(2) Consultations.--In conducting the study under subsection
(a), the Comptroller General of the United States shall consult
with--
(A) drug manufacturers involved in the research and
development of medical countermeasures to address
biological, chemical, radiological, and nuclear
threats;
(B) stakeholders involved in investing in the
research and development of such medical
countermeasures, including venture capitalists;
(C) the Federal Government agencies responsible for
advancing, reviewing, and procuring such medical
countermeasures, including--
(i) the Department of Health and Human
Services, including the Office of the Assistant
Secretary for Preparedness and Response, the
Biomedical Advanced Research and Development
Authority, and the Food and Drug
Administration; and
(ii) the Department of Defense;
(D) biodefense stakeholders, as applicable; and
(E) drug manufacturers involved in the research and
development of therapies that address--
(i) tropical diseases (as defined in section
524(a) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 360n(a))); or
(ii) rare pediatric diseases (as defined in
section 529(a) of such Act (21 U.S.C.
360ff(a))).
(3) Initial assessment.--Not later than 10 years after the
date of enactment of this Act, the Comptroller General of the
United States shall submit to the Committee on Health,
Education, Labor, and Pensions of the Senate and the Committee
on Energy and Commerce of the House of Representatives an
initial assessment of the effectiveness of the priority review
voucher program set forth in section 565A of the Federal Food,
Drug, and Cosmetic Act, as added by subsection (a).
(4) Report.--Not later than 16 years after the date of
enactment of this Act, the Comptroller General of the United
States shall submit to the Committee on Health, Education,
Labor, and Pensions of the Senate and the Committee on Energy
and Commerce of the House of Representatives a report
containing the results of the study conducted under paragraph
(1).
(5) Protection of national security.--The Comptroller General
of the United States shall conduct the study under paragraph
(1) and issue the assessment and report under paragraphs (3)
and (4) in a manner that does not compromise national security.
Purpose and Summary
The purpose of H.R. 3299 is to enhance America's
preparedness for biological threats and resulting public health
emergencies. H.R. 3299 would improve and enhance our national
preparedness in several ways: first, a Government
Accountability Office (GAO) study would evaluate our current
local and state emergency preparedness efforts to determine how
to increase effectiveness; second, the bill would require
coordination between Centers for Disease Control (CDC) and
Biomedical Advanced Research and Development Authority (BARDA);
third, the bill would increase the efficiency for contracting
with companies to develop and procure products; fourth, the
bill would amend an existing five year budget plan requirement
to include pandemic influenza; and finally, the bill would
provide a necessary and valuable incentive to ensure innovators
develop medical products for national defense.
H.R. 3299 also would establish a new priority review
voucher (PRV) program at the Food and Drug Administration
(FDA). Under this program, the Secretary would award a priority
review voucher to sponsors of drugs that meet certain criteria,
including that the drug prevent or treat harm from a
biological, chemical, radiological, or nuclear agent that has
been identified as a material threat by the Department of
Homeland Security.
Background and Need for Legislation
The past several years have demonstrated the global nature
of biological threats. The Ebola outbreak in Western Africa and
the emergence of Zika illustrate the importance of
preparedness. A bipartisan report, issued on October 28, 2016,
by the Blue Ribbon Study Panel on Biodefense, stated that
``[t]he United States is underprepared for biological threats.
. . . The Nation is dangerously vulnerable to a biological
event. The root cause of this continuing vulnerability is the
lack of strong centralized leadership at the highest level of
government.''\1\ H.R. 3299 will address ``serious gaps and
inadequacies that continue to leave the Nation vulnerable to
threats from nature and terrorists alike.''\2\
---------------------------------------------------------------------------
\1\A National Blueprint for Biodefense: Leadership and Major Reform
Needed to Optimize Efforts. Bipartisan Reform of the Blue Ribbon Study
Panel on Biodefense. P. iv
\2\Ibid. P. iv.
---------------------------------------------------------------------------
Hearings
The Subcommittee on Health held a hearing on H.R. 3299 on
May 19, 2016. The Subcommittee received testimony from:
Col. Russell Coleman, Ph.D., Joint Program
Manager, Medical Countermeasures Systems, U.S.
Department of Defense;
Richard Hatchett, M.D., Acting Director,
Biomedical Advanced Research and Development Authority,
U.S. Department of Health and Human Services; and,
Michael Mair, Director of Strategic
Operations, Office of Counterterrorism and Emerging
Threats, U.S. Food and Drug Administration.
Committee Consideration
On June 7 and 8, 2016, the Subcommittee on Health met in
open markup session and forwarded H.R. 3299 to the full
Committee, as amended, by a voice vote. On July 12, 13, and 14,
2016, the full Committee on Energy and Commerce met in open
markup session and ordered H.R. 3299 reported to the House, as
amended, by a recorded vote of 36 yeas and 15 nays.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
following reflects the record votes taken during the Committee
consideration:
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held a hearing and made
findings that are reflected in this report.
Statement of General Performance Goals and Objectives
H.R. 3299 would increase American emergency preparedness by
increasing administrative efficiency within the Office of
Assistant Secretary for Preparedness and Response (``ASPR'') in
the U.S. Department of Health and Human Services (``HHS'') and
provide incentives for companies to develop medical
countermeasures for public health emergencies and biochemical
attacks.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
3299 would result in no new or increased budget authority,
entitlement authority, or tax expenditures or revenues.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
In compliance with clause 9(e), 9(f), and 9(g) of rule XXI
of the Rules of the House of Representatives, the Committee
finds that H.R. 3299 contains no earmarks, limited tax
benefits, or limited tariff benefits.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 7, 2016.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3299, the
Strengthening Public Health Emergency Response Act of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Ellen Werble.
Sincerely,
Keith Hall.
Enclosure.
H.R. 3299--Strengthening Public Health Emergency Response Act of 2016
Summary: H.R. 3299 would establish an incentive program
that awards vouchers for priority review to companies that
obtain approval from the Food and Drug Administration (FDA) for
certain drugs that can be used to counter the effects of
biological, chemical, radiological, or nuclear agents. The bill
also would make several changes to the processes used to
procure medical countermeasures in the Department of Health and
Human Services (HHS). Finally, the Government Accountability
Office (GAO) would be required to report on programs to improve
state, local, and hospital preparedness. CBO estimates that
implementing H.R. 3299 would cost $20 million over the 2017-
2021 period, assuming appropriation of the necessary amounts.
Pay-as-you-go procedures do not apply to this legislation
because it would not affect direct spending or revenues.
CBO estimates that enacting H.R. 3299 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
H.R. 3299 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary effect of H.R. 3299 is shown in the following table.
The costs of this legislation fall primarily within budget
function 550 (health).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------
2017 2018 2019 2020 2021 2017-2021
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level..................................... 5 5 4 4 4 21
Estimated Outlays................................................. 4 4 4 4 4 20
----------------------------------------------------------------------------------------------------------------
Notes: Components do not sum to totals because of rounding.
Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted near the beginning of fiscal year 2017 and
that the necessary amounts will be appropriated.
FDA: The bill would create an incentive program that awards
vouchers for priority review to companies when they obtain FDA
approval of certain drugs to counter the effects from
biological, chemical, radiological, or nuclear agents. Such
vouchers can be used to accelerate review of a future drug
application. To redeem the voucher, a sponsor must pay an extra
fee set by FDA each year to cover the agency's cost for the
accelerated review. Such fees would be collected and made
available for obligation only to the extent and in the amounts
provided in advance in appropriation acts. (Estimated
collections and related spending offset each other in the year
fees are paid by sponsors.)
To establish the new voucher program, CBO expects FDA would
issue guidance containing the definition of the types of
products that would be eligible for a voucher. Based on an
analysis of information from FDA for similar programs, CBO
estimates that those activities would require about 10
employees to establish and to maintain the program. Assuming
appropriation of the necessary amounts, CBO estimates
implementing the new voucher program would cost FDA $18 million
over the 2017-2021 period.
HHS: The Office of the Assistant Secretary for Preparedness
and Response (ASPR) within HHS is required to work with other
HHS agencies to issue a Public Health Emergency Medical
Countermeasures Enterprise Strategy and Implementation Plan
(SIP) each year. The SIP outlines a strategy and an
accompanying implementation plan for medical countermeasures to
address chemical, biological, radiological, and nuclear
threats. H.R. 3299 would require ASPR to include specific
information about pandemic influenza in the SIP. It also would
require ASPR to report on the amount of time it takes the
Biomedical Advanced Research and Development Authority (BARDA)
to award contracts once requests for proposals are issued.
Based on information from HHS, CBO estimates that including
these new elements in the SIP would require one employee to
implement. Assuming appropriation of the necessary amounts, CBO
estimates this section would cost HHS about $1 million over the
2017-2021 period.
GAO: H.R. 3299 would require GAO to report on programs to
improve state, local, and hospital preparedness for public
health emergencies. CBO estimates implementing that provision
would cost about $500,000 over the 2017-2021 period; such
spending would be subject to the availability of appropriated
funds.
Pay-As-You-Go considerations: None
Increase in long-term direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
Intergovernmental and private-sector impact: H.R. 3299
contains no intergovernmental or private-sector mandates as
defined in the UMRA and would not affect the budgets of state,
local, or tribal governments.
Previous CBO estimates: On August 8, 2016, CBO transmitted
a cost estimate for S. 2055, the Medical Countermeasure
Innovation Act of 2016, as reported by the Senate Committee on
Health, Education, Labor, and Pensions on March 14, 2016.
Several provisions are similar to provisions in H.R. 3299;
however, S. 2055 would also authorize an additional program to
invest in research and provide incentives for the development
of medical countermeasures and would require HHS to prepare a
five-year budget plan for such countermeasures. H.R. 3299 would
authorize one program and modify existing requirements for an
annual strategy and implementation plan. CBO's estimate of the
budgetary effects reflects those differences.
Estimate prepared by: Federal costs: Andrea Noda, Ellen
Werble, and Rebecca Yip; Impact on state, local, and tribal
governments: Zachary Byrum; Impact on the private sector: Amy
Petz.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Duplication of Federal Programs
No provision of H.R. 3299 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting H.R. 3299
specifically directs to be completed no rule makings within the
meaning of 5 U.S.C. 551.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title; Table of contents
Section 1 provides that this Act may be cited as the
``Strengthening Public Health Emergency Response Act of 2016''.
Section 2. GAO report on state, local and hospital preparedness
programs
This section requires GAO to submit a report to Congress
within one year of enactment regarding the programs for
awarding cooperative agreements and grants and partnerships for
State and regional hospital preparedness to improve surge
capacity.
Section 3. Strategic national stockpile
This section requires that the Biomedical Advanced Research
and Development Authority and Centers for Disease Control
(BARDA) and Centers for Disease Control and Prevention (CDC)
have procedures in place to coordinate ongoing stockpiling.
Section 4. Project Bioshield procurement process
This section removes the requirement for Office of
Management and Budget (OMB) to review all BioShield contracts
independently. This independent review is no longer necessary
because the funds, which were originally housed at Department
of Homeland Security (DHS) is now housed at HHS. This will
remove an unnecessary level of bureaucracy and expedite the
contracting process.
Section 5. BARDA transaction authority
This section would give BARDA the sole authority to
negotiate and award its own medical countermeasure research and
development contracts.
Section 6. Public health emergency medical countermeasures enterprise
strategy and implementation plan
The 2013 Pandemic and All-Hazards Preparedness
Reauthorization Act (PAHPRA) legislation required ASPR to
create a 5-year medical countermeasure budget plan. The purpose
of this plan was to anticipate countermeasure funding needs and
spending plans across all chemical, biological, radiological
and nuclear (CBRN) threats. In addition to CBRN, this section
would require the 5-year budget to include planning for
pandemic influenza, one of the largest public health threats we
face today.
Section 7. Priority review to encourage treatments for agents that
present national security threats
This section creates a new, permanent PRV program. This
program would award a qualifying sponsor of a material threat
medical countermeasures application a PRV, which entitles the
sponsor to a second priority review of any other human drug
application. To qualify for the award, a material threat
medical countermeasure application must be for a human drug
indicated to prevent, or treat harm from, a biological,
chemical, radiological, or nuclear agent identified as a
material threat. Additionally, the Secretary must deem the
medical countermeasure application eligible for priority review
and the medical countermeasure application must be approved
after the date of enactment. The PRV is transferrable and there
is no limit on how many times a voucher may be transferred or
sold before it is used. The sponsor must notify FDA of its
intent to transfer the voucher. Additionally, when a sponsor
uses the PRV, it must notify FDA 90 days in advance of
submitting an application for priority review and is required
to pay an additional user fee, which shall be determined by the
Secretary at the beginning of each fiscal year, starting after
September 30, 2016.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
PUBLIC HEALTH SERVICE ACT
* * * * * * *
TITLE III--GENERAL POWERS AND DUTIES OF PUBLIC HEALTH SERVICE
* * * * * * *
Part B--Federal-State Cooperation
* * * * * * *
SEC. 319F-2. STRATEGIC NATIONAL STOCKPILE AND SECURITY COUNTERMEASURE
PROCUREMENTS.
(a) Strategic National Stockpile.--
(1) In general.--The Secretary, in collaboration with
the Director of the Centers for Disease Control and
Prevention, and in coordination with the Secretary of
Homeland Security (referred to in this section as the
``Homeland Security Secretary''), shall maintain a
stockpile or stockpiles of drugs, vaccines and other
biological products, medical devices, and other
supplies in such numbers, types, and amounts as are
determined consistent with section 2811 by the
Secretary to be appropriate and practicable, taking
into account other available sources, to provide for
the emergency health security of the United States,
including the emergency health security of children and
other vulnerable populations, in the event of a
bioterrorist attack or other public health emergency.
The Secretary shall conduct an annual review (taking
into account at-risk individuals) of the contents of
the stockpile, including non-pharmaceutical supplies,
and make necessary additions or modifications to the
contents based on such review and shall submit such
review annually to the appropriate congressional
committees of jurisdiction to the extent that
disclosure of such information does not compromise
national security.
(2) Procedures.--The Secretary, in managing the
stockpile under paragraph (1), shall--
(A) consult with the working group under
section 319F(a);
(B) ensure that adequate procedures are
followed with respect to such stockpile for
inventory management and accounting, and for
the physical security of the stockpile;
(C) in consultation with Federal, State, and
local officials, take into consideration the
timing and location of special events;
(D) review and revise, as appropriate, the
contents of the stockpile on a regular basis to
ensure that emerging threats, advanced
technologies, and new countermeasures are
adequately considered and that the potential
depletion of countermeasures currently in the
stockpile is identified and appropriately
addressed, including through necessary
replenishment;
(E) devise plans for the effective and timely
supply-chain management of the stockpile, in
consultation with appropriate Federal, State
and local agencies, and the public and private
health care infrastructure;
(F) deploy the stockpile as required by the
Secretary of Homeland Security to respond to an
actual or potential emergency;
(G) deploy the stockpile at the discretion of
the Secretary to respond to an actual or
potential public health emergency or other
situation in which deployment is necessary to
protect the public health or safety; [and]
(H) ensure the adequate physical security of
the stockpile[.]; and
(I) ensure procedures are in place to
coordinate the ongoing stockpiling by the
Biomedical Advanced Research and Development
Authority and Centers for Disease Control and
Prevention of qualified countermeasures (as
defined in section 319F-1) for which funds have
been made available under this part, security
countermeasures (as defined in this section),
and qualified pandemic or epidemic products (as
defined in section 319F-3) for which funds have
been made available under section 319L in order
to avoid any gaps in preparedness.
(b) Smallpox Vaccine Development.--
(1) In general.--The Secretary shall award contracts,
enter into cooperative agreements, or carry out such
other activities as may reasonably be required in order
to ensure that the stockpile under subsection (a)
includes an amount of vaccine against smallpox as
determined by such Secretary to be sufficient to meet
the health security needs of the United States.
(2) Rule of construction.--Nothing in this section
shall be construed to limit the private distribution,
purchase, or sale of vaccines from sources other than
the stockpile described in subsection (a).
(c) Additional Authority Regarding Procurement of Certain
Countermeasures; Availability of Special Reserve Fund.--
(1) In general.--
(A) Use of fund.--A security countermeasure
may, in accordance with this subsection, be
procured with amounts in the special reserve
fund as defined in subsection (h).
(B) Security countermeasure.--For purposes of
this subsection, the term ``security
countermeasure'' means a drug (as that term is
defined by section 201(g)(1) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C.
321(g)(1))), biological product (as that term
is defined by section 351(i) of this Act (42
U.S.C. 262(i))), or device (as that term is
defined by section 201(h) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 321(h)))
that--
(i)(I) the Secretary determines to be
a priority (consistent with sections
302(2) and 304(a) of the Homeland
Security Act of 2002) to diagnose,
mitigate, prevent, or treat harm from
any biological, chemical, radiological,
or nuclear agent identified as a
material threat under paragraph
(2)(A)(ii), or to diagnose, mitigate,
prevent, or treat harm from a condition
that may result in adverse health
consequences or death and may be caused
by administering a drug, biological
product, or device against such an
agent;
(II) the Secretary determines under
paragraph (2)(B)(ii) to be a necessary
countermeasure; and
(III)(aa) is approved or cleared
under chapter V of the Federal Food,
Drug, and Cosmetic Act or licensed
under section 351 of this Act; or
(bb) is a countermeasure for which
the Secretary determines that
sufficient and satisfactory clinical
experience or research data (including
data, if available, from pre-clinical
and clinical trials) support a
reasonable conclusion that the
countermeasure will qualify for
approval or licensing within 10 years
after the date of a determination under
paragraph (5); or
(ii) is authorized for emergency use
under section 564 of the Federal Food,
Drug, and Cosmetic Act.
(2) Determination of material threats.--
(A) Material threat.--The Homeland Security
Secretary, in consultation with the Secretary
and the heads of other agencies as appropriate,
shall on an ongoing basis--
(i) assess current and emerging
threats of chemical, biological,
radiological, and nuclear agents; and
(ii) determine which of such agents
present a material threat against the
United States population sufficient to
affect national security.
(B) Public health impact; necessary
countermeasures.--The Secretary shall on an
ongoing basis--
(i) assess the potential public
health consequences for the United
States population of exposure to agents
identified under subparagraph (A)(ii);
and
(ii) determine, on the basis of such
assessment, the agents identified under
subparagraph (A)(ii) for which
countermeasures are necessary to
protect the public health.
(C) Notice to congress.--The Secretary and
the Homeland Security Secretary shall promptly
notify the appropriate committees of Congress
that a determination has been made pursuant to
subparagraph (A) or (B).
(D) Assuring access to threat information.--
In making the assessment and determination
required under subparagraph (A), the Homeland
Security Secretary shall use all relevant
information to which such Secretary is entitled
under section 202 of the Homeland Security Act
of 2002, including but not limited to
information, regardless of its level of
classification, relating to current and
emerging threats of chemical, biological,
radiological, and nuclear agents.
(3) Assessment of availability and appropriateness of
countermeasures.--
(A) In general.--The Secretary, in
consultation with the Homeland Security
Secretary, shall assess on an ongoing basis the
availability and appropriateness of specific
countermeasures to address specific threats
identified under paragraph (2).
(B) Information.--The Secretary shall
institute a process for making publicly
available the results of assessments under
subparagraph (A) while withholding such
information as--
(i) would, in the judgment of the
Secretary, tend to reveal public health
vulnerabilities; or
(ii) would otherwise be exempt from
disclosure under section 552 of title
5, United States Code.
(4) Call for development of countermeasures;
commitment for recommendation for procurement.--
(A) Proposal to the president.--If, pursuant
to an assessment under paragraph (3), the
Homeland Security Secretary and the Secretary
make a determination that a countermeasure
would be appropriate but is either
currently not developed or unavailable for
procurement as a security countermeasure or is
approved, licensed, or cleared only for
alternative uses, such Secretaries may jointly
submit to the President a proposal to--
(i) issue a call for the development
of such countermeasure; and
(ii) make a commitment that, upon the
first development of such
countermeasure that meets the
conditions for procurement under
paragraph (5), the Secretaries will,
based in part on information obtained
pursuant to such call, [make a
recommendation under paragraph (6) that
the special reserve fund as defined in
subsection (h) be made available for
the procurement of such countermeasure]
make available the special reserve fund
as defined in subsection (h) for
procurement of such countermeasure.
(B) Countermeasure specifications.--The
Homeland Security Secretary and the Secretary
shall, to the extent practicable, include in
the proposal under subparagraph (A)--
(i) estimated quantity of purchase
(in the form of number of doses or
number of effective courses of
treatments regardless of dosage form);
(ii) necessary measures of minimum
safety and effectiveness;
(iii) estimated price for each dose
or effective course of treatment
regardless of dosage form; and
(iv) other information that may be
necessary to encourage and facilitate
research, development, and manufacture
of the countermeasure or to provide
specifications for the countermeasure.
(C) Presidential approval.--If the President
approves a proposal under subparagraph (A), the
Homeland Security Secretary and the Secretary
shall make known to persons who may respond to
a call for the countermeasure involved--
(i) the call for the countermeasure;
(ii) specifications for the
countermeasure under subparagraph (B);
and
(iii) the commitment described in
subparagraph (A)(ii).
(5) Secretary's determination of countermeasures
appropriate for funding from special reserve fund.--
(A) In general.--The Secretary, in accordance
with the provisions of this paragraph, shall
identify specific security countermeasures that
the Secretary determines, in consultation with
the Homeland Security Secretary, to be
appropriate for inclusion in the stockpile
under subsection (a) pursuant to procurements
made with amounts in the special reserve fund
as defined in subsection (h) (referred to in
this subsection individually as a ``procurement
under this subsection'').
(B) Requirements.--In making a determination
under subparagraph (A) with respect to a
security countermeasure, the Secretary shall
determine and consider the following:
(i) The quantities of the product
that will be needed to meet the
stockpile needs.
(ii) The feasibility of production
and delivery within 10 years of
sufficient quantities of the product.
(iii) Whether there is a lack of a
significant commercial market for the
product at the time of procurement,
other than as a security
countermeasure.
(6) [Recommendation for president's approval.--]
Subsequent specific countermeasures._
[(A) Recommendation for procurement.--In the
case of a security countermeasure that the
Secretary has, in accordance with paragraphs
(3) and (5), determined to be appropriate for
procurement under this subsection, the Homeland
Security Secretary and the Secretary shall
jointly submit to the President, in
coordination with the Director of the Office of
Management and Budget, a recommendation that
the special reserve fund as defined in
subsection (h) be made available for the
procurement of such countermeasure.
[(B) Presidential approval.--The special
reserve fund as defined in subsection (h) is
available for a procurement of a security
countermeasure only if the President has
approved a recommendation under subparagraph
(A) regarding the countermeasure.
[(C) Notice to appropriate congressional
committees.--The Secretary and the Homeland
Security Secretary shall notify the appropriate
congressional committees of each decision of
the President to approve a recommendation under
subparagraph (A). Such notice shall include an
explanation of the decision to make available
the special reserve fund as defined in
subsection (h) for procurement of such a
countermeasure, including, where available, the
number of, nature of, and other information
concerning potential suppliers of such
countermeasure, and whether other potential
suppliers of the same or similar
countermeasures were considered and rejected
for procurement under this section and the
reasons therefor.
[(D) Subsequent specific countermeasures.--
]Procurement under this subsection of a
security countermeasure for a particular
purpose does not preclude the subsequent
procurement under this subsection of any other
security countermeasure for such purpose if the
Secretary has determined under paragraph (5)(A)
that such countermeasure is appropriate for
inclusion in the stockpile and if, as
determined by the Secretary, such
countermeasure provides improved safety or
effectiveness, or for other reasons enhances
preparedness to respond to threats of use of a
biological, chemical, radiological, or nuclear
agent. Such a determination by the Secretary is
committed to agency discretion.
[(E) Rule of construction.--Recommendations
and approvals under this paragraph apply solely
to determinations that the special reserve fund
as defined in subsection (h) will be made
available for a procurement of a security
countermeasure, and not to the substance of
contracts for such procurement or other matters
relating to awards of such contracts.]
(7) Procurement.--
[(A) In general.--For purposes of a
procurement under this subsection that
is approved by the President under
paragraph (6), the Homeland Security
Secretary and the Secretary shall have
responsibilities in accordance with
subparagraphs (B) and (C).
[(B) Interagency agreement; cost.--
The Homeland Security Secretary shall
enter into an agreement with the
Secretary for procurement of a security
countermeasure in accordance with the
provisions of this paragraph. The
special reserve fund as defined in
subsection (h) shall be available for
payments made by the Secretary to a
vendor for such procurement.]
(A) Payments from special reserve
fund.--The special reserve fund as
defined in subsection (h) shall be
available for payments made by the
Secretary to a vendor for procurement
of a security countermeasure in
accordance with the provisions of this
paragraph.
[(C)] (B) Procurement.--
(i) In general.--The
Secretary shall be responsible
for--
(I) arranging for
procurement of a
security
countermeasure,
including negotiating
terms (including
quantity, production
schedule, and price)
of, and entering into,
contracts and
cooperative agreements,
and for carrying out
such other activities
as may reasonably be
required, including
advanced research and
development, in
accordance with the
provisions of this
subparagraph; and
(II) promulgating
such regulations as the
Secretary determines
necessary to implement
the provisions of this
subsection.
(ii) Contract terms.--A
contract for procurements under
this subsection shall (or, as
specified below, may) include
the following terms:
(I) Payment
conditioned on
delivery.--The contract
shall provide that no
payment may be made
until delivery of a
portion, acceptable to
the Secretary, of the
total number of units
contracted for, except
that, notwithstanding
any other provision of
law, the contract may
provide that, if the
Secretary determines
(in the Secretary's
discretion) that an
advance payment,
partial payment for
significant milestones,
or payment to increase
manufacturing capacity
is necessary to ensure
success of a project,
the Secretary shall pay
an amount, not to
exceed 10 percent of
the contract amount, in
advance of delivery.
The Secretary shall, to
the extent practicable,
make the determination
of advance payment at
the same time as the
issuance of a
solicitation. The
contract shall provide
that such advance
payment is required to
be repaid if there is a
failure to perform by
the vendor under the
contract. The contract
may also provide for
additional advance
payments of 5 percent
each for meeting the
milestones specified in
such contract, except
that such payments
shall not exceed 50
percent of the total
contract amount. If the
specified milestones
are reached, the
advanced payments of 5
percent shall not be
required to be repaid.
Nothing in this
subclause shall be
construed as affecting
the rights of vendors
under provisions of law
or regulation
(including the Federal
Acquisition Regulation)
relating to the
termination of
contracts for the
convenience of the
Government.
(II) Discounted
payment.--The contract
may provide for a
discounted price per
unit of a product that
is not licensed,
cleared, or approved as
described in paragraph
(1)(B)(i)(III)(aa) at
the time of delivery,
and may provide for
payment of an
additional amount per
unit if the product
becomes so licensed,
cleared, or approved
before the expiration
date of the contract
(including an
additional amount per
unit of product
delivered before the
effective date of such
licensing, clearance,
or approval).
(III) Contract
duration.--The contract
shall be for a period
not to exceed five
years, except that, in
first awarding the
contract, the Secretary
may provide for a
longer duration, not
exceeding 10 years, if
the Secretary
determines that
complexities or other
difficulties in
performance under the
contract justify such a
period. The contract
shall be renewable for
additional periods,
none of which shall
exceed five years.
(IV) Storage by
vendor.--The contract
may provide that the
vendor will provide
storage for stocks of a
product delivered to
the ownership of the
Federal Government
under the contract, for
such period and under
such terms and
conditions as the
Secretary may specify,
and in such case
amounts from the
special reserve fund as
defined in subsection
(h) shall be available
for costs of shipping,
handling, storage, and
related costs for such
product.
(V) Product
approval.--The contract
shall provide that the
vendor seek approval,
clearance, or licensing
of the product from the
Secretary; for a
timetable for the
development of data and
other information to
support such approval,
clearance, or
licensing; and that the
Secretary may waive
part or all of this
contract term on
request of the vendor
or on the initiative of
the Secretary.
(VI) Non-stockpile
transfers of security
countermeasures.--The
contract shall provide
that the vendor will
comply with all
applicable export-
related controls with
respect to such
countermeasure.
(VII) Sales
exclusivity.--The
contract may provide
that the vendor is the
exclusive supplier of
the product to the
Federal Government for
a specified period of
time, not to exceed the
term of the contract,
on the condition that
the vendor is able to
satisfy the needs of
the Government. During
the agreed period of
sales exclusivity, the
vendor shall not assign
its rights of sales
exclusivity to another
entity or entities
without approval by the
Secretary. Such a sales
exclusivity provision
in such a contract
shall constitute a
valid basis for a sole
source procurement
under section 303(c)(1)
of the Federal Property
and Administrative
Services Act of 1949
(41 U.S.C. 253(c)(1)).
(VIII) Warm based
surge capacity.--The
contract may provide
that the vendor
establish domestic
manufacturing capacity
of the product to
ensure that additional
production of the
product is available in
the event that the
Secretary determines
that there is a need to
quickly purchase
additional quantities
of the product. Such
contract may provide a
fee to the vendor for
establishing and
maintaining such
capacity in excess of
the initial requirement
for the purchase of the
product. Additionally,
the cost of maintaining
the domestic
manufacturing capacity
shall be an allowable
and allocable direct
cost of the contract.
(IX) Contract
terms.--The Secretary,
in any contract for
procurement under this
section--
(aa) may
specify--
(AA) the dosing and administration
requirements for the
countermeasure to be developed
and procured;
(BB) the amount of funding that
will be dedicated by the
Secretary for advanced research,
development, and procurement of
the countermeasure; and
(CC) the specifications the
countermeasure must meet to
qualify for procurement under a
contract under this section; and
(bb) shall
provide a clear
statement of
defined
Government
purpose limited
to uses related
to a security
countermeasure,
as defined in
paragraph
(1)(B).
(iii) Availability of
simplified acquisition
procedures.--
(I) In general.--If
the Secretary
determines that there
is a pressing need for
a procurement of a
specific
countermeasure, the
amount of the
procurement under this
subsection shall be
deemed to be below the
threshold amount
specified in section
4(11) of the Office of
Federal Procurement
Policy Act (41 U.S.C.
403(11)), for purposes
of application to such
procurement, pursuant
to section 302A(a) of
the Federal Property
and Administrative
Services Act of 1949
(41 U.S.C. 252a(a)),
of--
(aa) section
303(g)(1)(A) of
the Federal
Property and
Administrative
Services Act of
1949 (41 U.S.C.
253(g)(1)(A))
and its
implementing
regulations;
and
(bb) section
302A(b) of such
Act (41 U.S.C.
252a(b)) and
its
implementing
regulations.
(II) Application of
certain provisions.--
Notwithstanding
subclause (I) and the
provision of law and
regulations referred to
in such clause, each of
the following
provisions shall apply
to procurements
described in this
clause to the same
extent that such
provisions would apply
to such procurements in
the absence of
subclause (I):
(aa) Chapter
37 of title 40,
United States
Code (relating
to contract
work hours and
safety
standards).
(bb)
Subsections (a)
and (b) of
section 7 of
the Anti-
Kickback Act of
1986 (41 U.S.C.
57(a) and (b)).
(cc) Section
304C of the
Federal
Property and
Administrative
Services Act of
1949 (41 U.S.C.
254d) (relating
to the
examination of
contractor
records).
(dd) Section
3131 of title
40, United
States Code
(relating to
bonds of
contractors of
public
buildings or
works).
(ee)
Subsection (a)
of section 304
of the Federal
Property and
Administrative
Services Act of
1949 (41 U.S.C.
254(a))
(relating to
contingent fees
to middlemen).
(ff) Section
6002 of the
Solid Waste
Disposal Act
(42 U.S.C.
6962).
(gg) Section
1354 of title
31, United
States Code
(relating to
the limitation
on the use of
appropriated
funds for
contracts with
entities not
meeting
veterans
employment
reporting
requirements).
(III) Internal
controls to be
established.--The
Secretary shall
establish appropriate
internal controls for
procurements made under
this clause, including
requirements with
respect to
documentation of the
justification for the
use of the authority
provided under this
paragraph with respect
to the procurement
involved.
(IV) Authority to
limit competition.--In
conducting a
procurement under this
subparagraph, the
Secretary may not use
the authority provided
for under subclause (I)
to conduct a
procurement on a basis
other than full and
open competition unless
the Secretary
determines that the
mission of the
BioShield Program under
the Project BioShield
Act of 2004 would be
seriously impaired
without such a
limitation.
(iv) Procedures other than
full and open competition.--
(I) In general.--In
using the authority
provided in section
303(c)(1) of title III
of the Federal Property
and Administrative
Services Act of 1949
(41 U.S.C. 253(c)(1))
to use procedures other
than competitive
procedures in the case
of a procurement under
this subsection, the
phrase ``available from
only one responsible
source'' in such
section 303(c)(1) shall
be deemed to mean
``available from only
one responsible source
or only from a limited
number of responsible
sources''.
(II) Relation to
other authorities.--The
authority under
subclause (I) is in
addition to any other
authority to use
procedures other than
competitive procedures.
(III) Applicable
government-wide
regulations.--The
Secretary shall
implement this clause
in accordance with
government-wide
regulations
implementing such
section 303(c)(1)
(including requirements
that offers be
solicited from as many
potential sources as is
practicable under the
circumstances, that
required notices be
published, and that
submitted offers be
considered), as such
regulations apply to
procurements for which
an agency has authority
to use procedures other
than competitive
procedures when the
property or services
needed by the agency
are available from only
one responsible source
or only from a limited
number of responsible
sources and no other
type of property or
services will satisfy
the needs of the
agency.
(v) Premium provision in
multiple award contracts.--
(I) In general.--If,
under this subsection,
the Secretary enters
into contracts with
more than one vendor to
procure a security
countermeasure, such
Secretary may,
notwithstanding any
other provision of law,
include in each of such
contracts a provision
that--
(aa)
identifies an
increment of
the total
quantity of
security
countermeasure
required,
whether by
percentage or
by numbers of
units; and
(bb) promises
to pay one or
more specified
premiums based
on the priority
of such
vendors'
production and
delivery of the
increment
identified
under item
(aa), in
accordance with
the terms and
conditions of
the contract.
(II) Determination of
government's
requirement not
reviewable.--If the
Secretary includes in
each of a set of
contracts a provision
as described in
subclause (I), such
Secretary's
determination of the
total quantity of
security countermeasure
required, and any
amendment of such
determination, is
committed to agency
discretion.
(vi) Extension of closing
date for receipt of proposals
not reviewable.--A decision by
the Secretary to extend the
closing date for receipt of
proposals for a procurement
under this subsection is
committed to agency discretion.
(vii) Limiting competition to
sources responding to request
for information.--In conducting
a procurement under this
subsection, the Secretary may
exclude a source that has not
responded to a request for
information under section
303A(a)(1)(B) of the Federal
Property and Administrative
Services Act of 1949 (41 U.S.C.
253a(a)(1)(B)) if such request
has given notice that the
Secretary may so exclude such a
source.
(viii) Flexibility.--In
carrying out this section, the
Secretary may, consistent with
the applicable provisions of
this section, enter into
contracts and other agreements
that are in the best interest
of the Government in meeting
identified security
countermeasure needs, including
with respect to reimbursement
of the cost of advanced
research and development as a
reasonable, allowable, and
allocable direct cost of the
contract involved.
(8) Interagency cooperation.--
(A) In general.--In carrying out activities
under this section, the Homeland Security
Secretary and the Secretary are authorized,
subject to subparagraph (B), to enter into
interagency agreements and other collaborative
undertakings with other agencies of the United
States Government. Such agreements may allow
other executive agencies to order qualified and
security countermeasures under procurement
contracts or other agreements established by
the Secretary. Such ordering process (including
transfers of appropriated funds between an
agency and the Department of Health and Human
Services as reimbursements for such orders for
countermeasures) may be conducted under the
authority of section 1535 of title 31, United
States Code, except that all such orders shall
be processed under the terms established under
this subsection for the procurement of
countermeasures.
(B) Limitation.--An agreement or undertaking
under this paragraph shall not authorize
another agency to exercise the authorities
provided by this section to the Homeland
Security Secretary or to the Secretary.
(d) Disclosures.--No Federal agency shall disclose under
section 552 of title 5, United States Code, any information
identifying the location at which materials in the stockpile
under subsection (a) are stored.
(e) Definition.--For purposes of subsection (a), the term
``stockpile'' includes--
(1) a physical accumulation (at one or more
locations) of the supplies described in subsection (a);
or
(2) a contractual agreement between the Secretary and
a vendor or vendors under which such vendor or vendors
agree to provide to such Secretary supplies described
in subsection (a).
(f) Authorization of Appropriations.--
(1) Strategic national stockpile.--For the purpose of
carrying out subsection (a), there are authorized to be
appropriated $533,800,000 for each of fiscal years 2014
through 2018. Such authorization is in addition to
amounts in the special reserve fund referred to in
subsection (h).
(2) Smallpox vaccine development.--For the purpose of
carrying out subsection (b), there are authorized to be
appropriated $509,000,000 for fiscal year 2002, and
such sums as may be necessary for each of fiscal years
2003 through 2006.
(g) Special Reserve Fund.--
(1) Authorization of appropriations.--In addition to
amounts appropriated to the special reserve fund prior
to the date of the enactment of this subsection, there
is authorized to be appropriated, for the procurement
of security countermeasures under subsection (c) and
for carrying out section 319L (relating to the
Biomedical Advanced Research and Development
Authority), $2,800,000,000 for the period of fiscal
years 2014 through 2018. Amounts appropriated pursuant
to the preceding sentence are authorized to remain
available until September 30, 2019.
(2) Use of special reserve fund for advanced research
and development.--The Secretary may utilize not more
than 50 percent of the amounts authorized to be
appropriated under paragraph (1) to carry out section
319L (related to the Biomedical Advanced Research and
Development Authority). Amounts authorized to be
appropriated under this subsection to carry out section
319L are in addition to amounts otherwise authorized to
be appropriated to carry out such section.
(3) Restrictions on use of funds.--Amounts in the
special reserve fund shall not be used to pay costs
other than payments made by the Secretary to a vendor
for advanced development (under section 319L) or for
procurement of a security countermeasure under
subsection (c)(7).
(4) Report.--Not later than 30 days after any date on
which the Secretary determines that the amount of funds
in the special reserve fund available for procurement
is less than $1,500,000,000, the Secretary shall submit
to the appropriate committees of Congress a report
detailing the amount of such funds available for
procurement and the impact such reduction in funding
will have--
(A) in meeting the security countermeasure
needs identified under this section; and
(B) on the annual Public Health Emergency
Medical Countermeasures Enterprise and Strategy
Implementation Plan (pursuant to section
2811(d)).
(h) Definitions.--In this section:
(1) The term ``advanced research and development''
has the meaning given such term in section 319L(a).
(2) The term ``special reserve fund'' means the
``Biodefense Countermeasures'' appropriations account,
any appropriation made available pursuant to section
521(a) of the Homeland Security Act of 2002, and any
appropriation made available pursuant to subsection
(g)(1).
* * * * * * *
SEC. 319L. BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT AUTHORITY.
(a) Definitions.--In this section:
(1) BARDA.--The term ``BARDA'' means the Biomedical
Advanced Research and Development Authority.
(2) Fund.--The term ``Fund'' means the Biodefense
Medical Countermeasure Development Fund established
under subsection (d).
(3) Other transactions.--The term ``other
transactions'' means transactions, other than
procurement contracts, grants, and cooperative
agreements, such as the Secretary of Defense may enter
into under section 2371 of title 10, United States
Code.
(4) Qualified countermeasure.--The term ``qualified
countermeasure'' has the meaning given such term in
section 319F-1.
(5) Qualified pandemic or epidemic product.--The term
``qualified pandemic or epidemic product'' has the
meaning given the term in section 319F-3.
(6) Advanced research and development.--
(A) In general.--The term ``advanced research
and development'' means, with respect to a
product that is or may become a qualified
countermeasure or a qualified pandemic or
epidemic product, activities that
predominantly--
(i) are conducted after basic
research and preclinical development of
the product; and
(ii) are related to manufacturing the
product on a commercial scale and in a
form that satisfies the regulatory
requirements under the Federal Food,
Drug, and Cosmetic Act or under section
351 of this Act.
(B) Activities included.--The term under
subparagraph (A) includes--
(i) testing of the product to
determine whether the product may be
approved, cleared, or licensed under
the Federal Food, Drug, and Cosmetic
Act or under section 351 of this Act
for a use that is or may be the basis
for such product becoming a qualified
countermeasure or qualified pandemic or
epidemic product, or to help obtain
such approval, clearance, or license;
(ii) design and development of tests
or models, including animal models, for
such testing;
(iii) activities to facilitate
manufacture of the product on a
commercial scale with consistently high
quality, as well as to improve and make
available new technologies to increase
manufacturing surge capacity;
(iv) activities to improve the shelf-
life of the product or technologies for
administering the product; and
(v) such other activities as are part
of the advanced stages of testing,
refinement, improvement, or preparation
of the product for such use and as are
specified by the Secretary.
(7) Security countermeasure.--The term ``security
countermeasure'' has the meaning given such term in
section 319F-2.
(8) Research tool.--The term ``research tool'' means
a device, technology, biological material (including a
cell line or an antibody), reagent, animal model,
computer system, computer software, or analytical
technique that is developed to assist in the discovery,
development, or manufacture of qualified
countermeasures or qualified pandemic or epidemic
products.
(9) Program manager.--The term ``program manager''
means an individual appointed to carry out functions
under this section and authorized to provide project
oversight and management of strategic initiatives.
(10) Person.--The term ``person'' includes an
individual, partnership, corporation, association,
entity, or public or private corporation, and a
Federal, State, or local government agency or
department.
(b) Strategic Plan for Countermeasure Research, Development,
and Procurement.--
(1) In general.--Not later than 6 months after the
date of enactment of the Pandemic and All-Hazards
Preparedness Act, the Secretary shall develop and make
public a strategic plan to integrate biodefense and
emerging infectious disease requirements with the
advanced research and development, strategic
initiatives for innovation, and the procurement of
qualified countermeasures and qualified pandemic or
epidemic products. The Secretary shall carry out such
activities as may be practicable to disseminate the
information contained in such plan to persons who may
have the capacity to substantially contribute to the
activities described in such strategic plan. The
Secretary shall update and incorporate such plan as
part of the National Health Security Strategy described
in section 2802.
(2) Content.--The strategic plan under paragraph (1)
shall guide--
(A) research and development, conducted or
supported by the Department of Health and Human
Services, of qualified countermeasures and
qualified pandemic or epidemic products against
possible biological, chemical, radiological,
and nuclear agents and to emerging infectious
diseases;
(B) innovation in technologies that may
assist advanced research and development of
qualified countermeasures and qualified
pandemic or epidemic products (such research
and development referred to in this section as
``countermeasure and product advanced research
and development''); and
(C) procurement of such qualified
countermeasures and qualified pandemic or
epidemic products by such Department.
(c) Biomedical Advanced Research and Development Authority.--
(1) Establishment.--There is established within the
Department of Health and Human Services the Biomedical
Advanced Research and Development Authority.
(2) In general.--Based upon the strategic plan
described in subsection (b), the Secretary shall
coordinate the acceleration of countermeasure and
product advanced research and development by--
(A) facilitating collaboration between the
Department of Health and Human Services and
other Federal agencies, relevant industries,
academia, and other persons, with respect to
such advanced research and development;
(B) promoting countermeasure and product
advanced research and development;
(C) facilitating contacts between interested
persons and the offices or employees authorized
by the Secretary to advise such persons
regarding requirements under the Federal Food,
Drug, and Cosmetic Act and under section 351 of
this Act; and
(D) promoting innovation to reduce the time
and cost of countermeasure and product advanced
research and development.
(3) Director.--The BARDA shall be headed by a
Director (referred to in this section as the
``Director'') who shall be appointed by the Secretary
and to whom the Secretary shall delegate such functions
and authorities as necessary to implement this section.
(4) Duties.--
(A) Collaboration.--To carry out the purpose
described in paragraph (2)(A), the Secretary
shall--
(i) facilitate and increase the
expeditious and direct communication
between the Department of Health and
Human Services and relevant persons
with respect to countermeasure and
product advanced research and
development, including by--
(I) facilitating such
communication regarding the
processes for procuring such
advanced research and
development with respect to
qualified countermeasures and
qualified pandemic or epidemic
products of interest; and
(II) soliciting information
about and data from research on
potential qualified
countermeasures and qualified
pandemic or epidemic products
and related technologies;
(ii) at least annually--
(I) convene meetings with
representatives from relevant
industries, academia, other
Federal agencies, international
agencies as appropriate, and
other interested persons;
(II) sponsor opportunities to
demonstrate the operation and
effectiveness of relevant
biodefense countermeasure
technologies; and
(III) convene such working
groups on countermeasure and
product advanced research and
development as the Secretary
may determine are necessary to
carry out this section; and
(iii) carry out the activities
described in section 405 of the
Pandemic and All-Hazards Preparedness
Act.
(B) Support advanced research and
development.--To carry out the purpose
described in paragraph (2)(B), the Secretary
shall--
(i) conduct ongoing searches for, and
support calls for, potential qualified
countermeasures and qualified pandemic
or epidemic products;
(ii) direct and coordinate the
countermeasure and product advanced
research and development activities of
the Department of Health and Human
Services;
(iii) establish strategic initiatives
to accelerate countermeasure and
product advanced research and
development (which may include advanced
research and development for purposes
of fulfilling requirements under the
Federal Food, Drug, and Cosmetic Act or
section 351 of this Act) and innovation
in such areas as the Secretary may
identify as priority unmet need areas;
and
(iv) award contracts, grants,
cooperative agreements, and enter into
other transactions, for countermeasure
and product advanced research and
development.
(C) Facilitating advice.--To carry out the
purpose described in paragraph (2)(C) the
Secretary shall--
(i) connect interested persons with
the offices or employees authorized by
the Secretary to advise such persons
regarding the regulatory requirements
under the Federal Food, Drug, and
Cosmetic Act and under section 351 of
this Act related to the approval,
clearance, or licensure of qualified
countermeasures or qualified pandemic
or epidemic products; and
(ii) with respect to persons
performing countermeasure and product
advanced research and development
funded under this section, enable such
offices or employees to provide to the
extent practicable such advice in a
manner that is ongoing and that is
otherwise designed to facilitate
expeditious development of qualified
countermeasures and qualified pandemic
or epidemic products that may achieve
such approval, clearance, or licensure.
(D) Supporting innovation.--To carry out the
purpose described in paragraph (2)(D), the
Secretary may award contracts, grants, and
cooperative agreements, or enter into other
transactions, such as prize payments, to
promote--
(i) innovation in technologies that
may assist countermeasure and product
advanced research and development;
(ii) research on and development of
research tools and other devices and
technologies; and
(iii) research to promote strategic
initiatives, such as rapid diagnostics,
broad spectrum antimicrobials, vaccine-
manufacturing technologies, dose-
sparing technologies, efficacy-
increasing technologies, and platform
technologies.
(5) Transaction authorities.--
(A) Other transactions.--
(i) In general.--The Secretary shall
have the authority to enter into other
transactions under this subsection in
the same manner as the Secretary of
Defense enters into such transactions
under section 2371 of title 10, United
States Code.
(ii) Limitations on authority.--
(I) In general.--Subsections
(b), (c), and (h) of section
845 of the National Defense
Authorization Act for Fiscal
Year 1994 (10 U.S.C. 2371 note)
shall apply to other
transactions under this
subparagraph as if such
transactions were for prototype
projects described by
subsection (a) of such section
845.
(II) Written determinations
required.--The authority of
this subparagraph may be
exercised for a project that is
expected to cost the Department
of Health and Human Services in
excess of $20,000,000 only upon
a written determination by the
senior procurement executive
for the Department (as
designated for purpose of
section 16(c) of the Office of
Federal Procurement Policy Act
(41 U.S.C. 414(c))), that the
use of such authority is
essential to promoting the
success of the project. The
authority of the senior
procurement executive under
this subclause may not be
delegated.
(iii) Guidelines.--The Secretary
shall establish guidelines regarding
the use of the authority under clause
(i). Such guidelines shall include
auditing requirements.
(B) Expedited authorities.--
(i) In general.--In awarding
contracts, grants, and cooperative
agreements, and in entering into other
transactions under subparagraph (B) or
(D) of paragraph (4), the Secretary
shall have the expedited procurement
authorities, the authority to expedite
peer review, and the authority for
personal services contracts, supplied
by subsections (b), (c), and (d) of
section 319F-1.
(ii) Application of provisions.--
Provisions in such section 319F-1 that
apply to such authorities and that
require institution of internal
controls, limit review, provide for
Federal Tort Claims Act coverage of
personal services contractors, and
commit decisions to the discretion of
the Secretary shall apply to the
authorities as exercised pursuant to
this paragraph.
(iii) Authority to limit
competition.--For purposes of applying
section 319F-1(b)(1)(D) to this
paragraph, the phrase ``BioShield
Program under the Project BioShield Act
of 2004'' shall be deemed to mean the
countermeasure and product advanced
research and development program under
this section.
(iv) Availability of data.--The
Secretary shall require that, as a
condition of being awarded a contract,
grant, cooperative agreement, or other
transaction under subparagraph (B) or
(D) of paragraph (4), a person make
available to the Secretary on an
ongoing basis, and submit upon request
to the Secretary, all data related to
or resulting from countermeasure and
product advanced research and
development carried out pursuant to
this section.
(C) Advance payments; advertising.--The
Secretary may waive the requirements of section
3324(a) of title 31, United States Code, or
section 3709 of the Revised Statutes of the
United States (41 U.S.C. 5) upon the
determination by the Secretary that such waiver
is necessary to obtain countermeasures or
products under this section.
(D) Milestone-based payments allowed.--In
awarding contracts, grants, and cooperative
agreements, and in entering into other
transactions, under this section, the Secretary
may use milestone-based awards and payments.
(E) Foreign nationals eligible.--The
Secretary may under this section award
contracts, grants, and cooperative agreements
to, and may enter into other transactions with,
highly qualified foreign national persons
outside the United States, alone or in
collaboration with American participants, when
such transactions may inure to the benefit of
the American people.
(F) Establishment of research centers.--The
Secretary may assess the feasibility and
appropriateness of establishing, through
contract, grant, cooperative agreement, or
other transaction, an arrangement with an
existing research center in order to achieve
the goals of this section. If such an agreement
is not feasible and appropriate, the Secretary
may establish one or more federally-funded
research and development centers, or
university-affiliated research centers, in
accordance with section 303(c)(3) of the
Federal Property and Administrative Services
Act of 1949 (41 U.S.C. 253(c)(3)).
(G) Government purpose.--In awarding
contracts, grants, and cooperative agreements
under this section, the Secretary shall provide
a clear statement of defined Government purpose
related to activities included in subsection
(a)(6)(B) for a qualified countermeasure or
qualified pandemic or epidemic product.
(H) Contracting authority clarification.--The
Secretary shall delegate authority for
negotiating and entering into any contracts,
grants, or cooperative agreements under this
section to the Director.
(6) At-risk individuals.--In carrying out the
functions under this section, the Secretary may give
priority to the advanced research and development of
qualified countermeasures and qualified pandemic or
epidemic products that are likely to be safe and
effective with respect to children, pregnant women,
elderly, and other at-risk individuals.
(7) Personnel authorities.--
(A) Specially qualified scientific and
professional personnel.--
(i) In general.--In addition to any
other personnel authorities, the
Secretary may--
(I) without regard to those
provisions of title 5, United
States Code, governing
appointments in the competitive
service, appoint highly
qualified individuals to
scientific or professional
positions in BARDA, such as
program managers, to carry out
this section; and
(II) compensate them in the
same manner and subject to the
same terms and conditions in
which individuals appointed
under section 9903 of such
title are compensated, without
regard to the provisions of
chapter 51 and subchapter III
of chapter 53 of such title
relating to classification and
General Schedule pay rates.
(ii) Manner of exercise of
authority.--The authority provided for
in this subparagraph shall be exercised
subject to the same limitations
described in section 319F-1(e)(2).
(iii) Term of appointment.--The term
limitations described in section
9903(c) of title 5, United States Code,
shall apply to appointments under this
subparagraph, except that the
references to the ``Secretary'' and to
the ``Department of Defense's national
security missions'' shall be deemed to
be to the Secretary of Health and Human
Services and to the mission of the
Department of Health and Human Services
under this section.
(B) Special consultants.--In carrying out
this section, the Secretary may appoint special
consultants pursuant to section 207(f).
(C) Limitation.--
(i) In general.--The Secretary may
hire up to 100 highly qualified
individuals, or up to 50 percent of the
total number of employees, whichever is
less, under the authorities provided
for in subparagraphs (A) and (B).
(ii) Report.--The Secretary shall
report to Congress on a biennial basis
on the implementation of this
subparagraph.
(d) Fund.--
(1) Establishment.--There is established the
Biodefense Medical Countermeasure Development Fund,
which shall be available to carry out this section in
addition to such amounts as are otherwise available for
this purpose.
(2) Funding.--To carry out the purposes of this
section, there is authorized to be appropriated to the
Fund $415,000,000 for each of fiscal years 2014 through
2018, such amounts to remain available until expended.
(e) Inapplicability of Certain Provisions.--
(1) Disclosure.--
(A) In general.--The Secretary shall withhold
from disclosure under section 552 of title 5,
United States Code, specific technical data or
scientific information that is created or
obtained during the countermeasure and product
advanced research and development carried out
under subsection (c) that reveals significant
and not otherwise publicly known
vulnerabilities of existing medical or public
health defenses against biological, chemical,
nuclear, or radiological threats. Such
information shall be deemed to be information
described in section 552(b)(3) of title 5,
United States Code.
(B) Review.--Information subject to
nondisclosure under subparagraph (A) shall be
reviewed by the Secretary every 5 years, or
more frequently as determined necessary by the
Secretary, to determine the relevance or
necessity of continued nondisclosure.
(C) Sunset.--This paragraph shall cease to
have force or effect on the date that is 12
years after the date of enactment of the
Pandemic and All-Hazards Preparedness Act.
(2) Review.--Notwithstanding section 14 of the
Federal Advisory Committee Act, a working group of
BARDA under this section and the National Biodefense
Science Board under section 319M shall each terminate
on the date that is 5 years after the date on which
each such group or Board, as applicable, was
established. Such 5-year period may be extended by the
Secretary for one or more additional 5-year periods if
the Secretary determines that any such extension is
appropriate.
(f) Independent Evaluation.--
(1) In general.--Not later than 180 days after the
date of enactment of this subsection, the Comptroller
General of the United States shall conduct an
independent evaluation of the activities carried out to
facilitate flexible manufacturing capacity pursuant to
this section.
(2) Report.--Not later than 1 year after the date of
enactment of this subsection, the Comptroller General
of the United States shall submit to the appropriate
committees of Congress a report concerning the results
of the evaluation conducted under paragraph (1). Such
report shall review and assess--
(A) the extent to which flexible
manufacturing capacity under this section is
dedicated to chemical, biological,
radiological, and nuclear threats;
(B) the activities supported by flexible
manufacturing initiatives; and
(C) the ability of flexible manufacturing
activities carried out under this section to--
(i) secure and leverage leading
technical expertise with respect to
countermeasure advanced research,
development, and manufacturing
processes; and
(ii) meet the surge manufacturing
capacity needs presented by novel and
emerging threats, including chemical,
biological, radiological, and nuclear
agents.
* * * * * * *
TITLE XXVIII--NATIONAL ALL-HAZARDS PREPAREDNESS FOR PUBLIC HEALTH
EMERGENCIES
* * * * * * *
Subtitle B--All-Hazards Emergency Preparedness and Response
SEC. 2811. COORDINATION OF PREPAREDNESS FOR AND RESPONSE TO ALL-HAZARDS
PUBLIC HEALTH EMERGENCIES.
(a) In General.--There is established within the Department
of Health and Human Services the position of the Assistant
Secretary for Preparedness and Response. The President, with
the advice and consent of the Senate, shall appoint an
individual to serve in such position. Such Assistant Secretary
shall report to the Secretary.
(b) Duties.--Subject to the authority of the Secretary, the
Assistant Secretary for Preparedness and Response shall carry
out the following functions:
(1) Leadership.--Serve as the principal advisor to
the Secretary on all matters related to Federal public
health and medical preparedness and response for public
health emergencies.
(2) Personnel.--Register, credential, organize,
train, equip, and have the authority to deploy Federal
public health and medical personnel under the authority
of the Secretary, including the National Disaster
Medical System, and coordinate such personnel with the
Medical Reserve Corps and the Emergency System for
Advance Registration of Volunteer Health Professionals.
(3) Countermeasures.--Oversee advanced research,
development, and procurement of qualified
countermeasures (as defined in section 319F-1),
security countermeasures (as defined in section 319F-
2), and qualified pandemic or epidemic products (as
defined in section 319F-3).
(4) Coordination.--
(A) Federal integration.--Coordinate with
relevant Federal officials to ensure
integration of Federal preparedness and
response activities for public health
emergencies.
(B) State, local, and tribal integration.--
Coordinate with State, local, and tribal public
health officials, the Emergency Management
Assistance Compact, health care systems, and
emergency medical service systems to ensure
effective integration of Federal public health
and medical assets during a public health
emergency.
(C) Emergency medical services.--Promote
improved emergency medical services medical
direction, system integration, research, and
uniformity of data collection, treatment
protocols, and policies with regard to public
health emergencies.
(D) Policy coordination and strategic
direction.--Provide integrated policy
coordination and strategic direction with
respect to all matters related to Federal
public health and medical preparedness and
execution and deployment of the Federal
response for public health emergencies and
incidents covered by the National Response Plan
developed pursuant to section 504(6) of the
Homeland Security Act of 2002, or any successor
plan, before, during, and following public
health emergencies.
(E) Identification of inefficiencies.--
Identify and minimize gaps, duplication, and
other inefficiencies in medical and public
health preparedness and response activities and
the actions necessary to overcome these
obstacles.
(F) Coordination of grants and agreements.--
Align and coordinate medical and public health
grants and cooperative agreements as applicable
to preparedness and response activities
authorized under this Act, to the extent
possible, including program requirements,
timelines, and measurable goals, and in
consultation with the Secretary of Homeland
Security, to--
(i) optimize and streamline medical
and public health preparedness and
response capabilities and the ability
of local communities to respond to
public health emergencies; and
(ii) gather and disseminate best
practices among grant and cooperative
agreement recipients, as appropriate.
(G) Drill and operational exercises.--Carry
out drills and operational exercises, in
consultation with the Department of Homeland
Security, the Department of Defense, the
Department of Veterans Affairs, and other
applicable Federal departments and agencies, as
necessary and appropriate, to identify, inform,
and address gaps in and policies related to
all-hazards medical and public health
preparedness and response, including exercises
based on--
(i) identified threats for which
countermeasures are available and for
which no countermeasures are available;
and
(ii) unknown threats for which no
countermeasures are available.
(H) National security priority.--On a
periodic basis consult with, as applicable and
appropriate, the Assistant to the President for
National Security Affairs, to provide an update
on, and discuss, medical and public health
preparedness and response activities pursuant
to this Act and the Federal Food, Drug, and
Cosmetic Act, including progress on the
development, approval, clearance, and licensure
of medical countermeasures.
(5) Logistics.--In coordination with the Secretary of
Veterans Affairs, the Secretary of Homeland Security,
the General Services Administration, and other public
and private entities, provide logistical support for
medical and public health aspects of Federal responses
to public health emergencies.
(6) Leadership.--Provide leadership in international
programs, initiatives, and policies that deal with
public health and medical emergency preparedness and
response.
(7) Countermeasures budget plan.--Develop, and update
on an annual basis, a coordinated 5-year budget plan
based on the medical countermeasure priorities
described in subsection (d). Each such plan shall--
(A) include consideration of the entire
medical countermeasures enterprise, including--
(i) basic research and advanced
research and development;
(ii) approval, clearance, licensure,
and authorized uses of products; and
(iii) procurement, stockpiling,
maintenance, and replenishment of all
products in the Strategic National
Stockpile;
(B) inform prioritization of resources and
include measurable outputs and outcomes to
allow for the tracking of the progress made
toward identified priorities;
(C) identify medical countermeasure life-
cycle costs to inform planning, budgeting, and
anticipated needs within the continuum of the
medical countermeasure enterprise consistent
with section 319F-2; and
(D) be made available to the appropriate
committees of Congress upon request.
(c) Functions.--The Assistant Secretary for Preparedness and
Response shall--
(1) have lead responsibility within the Department of
Health and Human Services for emergency preparedness
and response policy coordination and strategic
direction;
(2) have authority over and responsibility for--
(A) the National Disaster Medical System
pursuant to section 2812;
(B) the Hospital Preparedness Cooperative
Agreement Program pursuant to section 319C-2;
(C) the Biomedical Advanced Research and
Development Authority pursuant to section 319L;
(D) the Medical Reserve Corps pursuant to
section 2813;
(E) the Emergency System for Advance
Registration of Volunteer Health Professionals
pursuant to section 319I; and
(F) administering grants and related
authorities related to trauma care under parts
A through C of title XII, such authority to be
transferred by the Secretary from the
Administrator of the Health Resources and
Services Administration to such Assistant
Secretary;
(3) exercise the responsibilities and authorities of
the Secretary with respect to the coordination of--
(A) the Public Health Emergency Preparedness
Cooperative Agreement Program pursuant to
section 319C-1;
(B) the Strategic National Stockpile pursuant
to section 319F-2; and
(C) the Cities Readiness Initiative; and
(4) assume other duties as determined appropriate by
the Secretary.
(d) Public Health Emergency Medical Countermeasures
Enterprise Strategy and Implementation Plan.--
(1) In general.--Not later than 180 days after the
date of enactment of this subsection, and every year
thereafter, the Assistant Secretary for Preparedness
and Response shall develop and submit to the
appropriate committees of Congress a coordinated
strategy and accompanying implementation plan for
medical countermeasures to address chemical,
biological, radiological, and nuclear threats. In
developing such a plan, the Assistant Secretary for
Preparedness and Response shall consult with the
Director of the Biomedical Advanced Research and
Development Authority, the Director of the National
Institutes of Health, the Director of the Centers for
Disease Control and Prevention, and the Commissioner of
Food and Drugs. Such strategy and plan shall be known
as the ``Public Health Emergency Medical
Countermeasures Enterprise Strategy and Implementation
Plan''.
(2) Requirements.--The plan under paragraph (1)
shall--
(A) describe the chemical, biological,
radiological, and nuclear agent or agents that
may present a threat to the Nation (which shall
include pandemic influenza) and the
corresponding efforts to develop qualified
countermeasures (as defined in section 319F-1),
security countermeasures (as defined in section
319F-2), or qualified pandemic or epidemic
products (as defined in section 319F-3) for
each threat;
(B) evaluate the progress of all activities
with respect to such countermeasures or
products, including research, advanced
research, development, procurement,
stockpiling, deployment, distribution, and
utilization;
(C) identify and prioritize near-, mid-, and
long-term needs with respect to such
countermeasures or products to address a
chemical, biological, radiological, and nuclear
threat or threats;
(D) identify, with respect to each category
of threat, a summary of all awards and
contracts, including advanced research and
development and procurement, that includes--
(i) the time elapsed from the
issuance of the initial solicitation or
request for a proposal to the
adjudication (such as the award, denial
of award, or solicitation termination);
and
(ii) an identification of projected
timelines, anticipated funding
allocations, benchmarks, and milestones
for each medical countermeasure
priority under subparagraph (C),
including projected needs with regard
to replenishment of the Strategic
National Stockpile;
(E) be informed by the recommendations of the
National Biodefense Science Board pursuant to
section 319M;
(F) evaluate progress made in meeting
timelines, allocations, benchmarks, and
milestones identified under subparagraph
(D)(ii);
(G) report on the amount of funds available
for procurement in the special reserve fund as
defined in section 319F-2(h) and the impact
this funding will have on meeting the
requirements under section 319F-2;
(H) incorporate input from Federal, State,
local, and tribal stakeholders;
(I) identify the progress made in meeting the
medical countermeasure priorities for at-risk
individuals (as defined in 2802(b)(4)(B)), as
applicable under subparagraph (C), including
with regard to the projected needs for related
stockpiling and replenishment of the Strategic
National Stockpile, including by addressing the
needs of pediatric populations with respect to
such countermeasures and products in the
Strategic National Stockpile, including--
(i) a list of such countermeasures
and products necessary to address the
needs of pediatric populations;
(ii) a description of measures taken
to coordinate with the Office of
Pediatric Therapeutics of the Food and
Drug Administration to maximize the
labeling, dosages, and formulations of
such countermeasures and products for
pediatric populations;
(iii) a description of existing gaps
in the Strategic National Stockpile and
the development of such countermeasures
and products to address the needs of
pediatric populations; and
(iv) an evaluation of the progress
made in addressing priorities
identified pursuant to subparagraph
(C);
(J) identify the use of authority and
activities undertaken pursuant to sections
319F-1(b)(1), 319F-1(b)(2), 319F-1(b)(3), 319F-
1(c), 319F-1(d), 319F-1(e), 319F-
2(c)(7)(C)(iii), 319F-2(c)(7)(C)(iv), and 319F-
2(c)(7)(C)(v) of this Act, and subsections
(a)(1), (b)(1), and (e) of section 564 of the
Federal Food, Drug, and Cosmetic Act, by
summarizing--
(i) the particular actions that were
taken under the authorities specified,
including, as applicable, the
identification of the threat agent,
emergency, or the biomedical
countermeasure with respect to which
the authority was used;
(ii) the reasons underlying the
decision to use such authorities,
including, as applicable, the options
that were considered and rejected with
respect to the use of such authorities;
(iii) the number of, nature of, and
other information concerning the
persons and entities that received a
grant, cooperative agreement, or
contract pursuant to the use of such
authorities, and the persons and
entities that were considered and
rejected for such a grant, cooperative
agreement, or contract, except that the
report need not disclose the identity
of any such person or entity;
(iv) whether, with respect to each
procurement that is approved by the
President under section 319F-2(c)(6), a
contract was entered into within one
year after such approval by the
President; and
(v) with respect to section 319F-
1(d), for the one-year period for which
the report is submitted, the number of
persons who were paid amounts totaling
$100,000 or greater and the number of
persons who were paid amounts totaling
at least $50,000 but less than
$100,000; [and]
(K) report on the amount of time between the
issuance of each request for a proposal or task
order from the Biomedical Advanced Research and
Development Authority and the award of a
contract pursuant to such request for a
proposal or task order; and
[(K)] (L) be made publicly available.
(3) GAO report.--
(A) In general.--Not later than 1 year after
the date of the submission to the Congress of
the first Public Health Emergency Medical
Countermeasures Enterprise Strategy and
Implementation Plan, the Comptroller General of
the United States shall conduct an independent
evaluation, and submit to the appropriate
committees of Congress a report, concerning
such Strategy and Implementation Plan.
(B) Content.--The report described in
subparagraph (A) shall review and assess--
(i) the near-term, mid-term, and
long-term medical countermeasure needs
and identified priorities of the
Federal Government pursuant to
paragraph (2)(C);
(ii) the activities of the Department
of Health and Human Services with
respect to advanced research and
development pursuant to section 319L;
and
(iii) the progress made toward
meeting the timelines, allocations,
benchmarks, and milestones identified
in the Public Health Emergency Medical
Countermeasures Enterprise Strategy and
Implementation Plan under this
subsection.
(e) Protection of National Security.--In carrying out
subsections (b)(7) and (d), the Secretary shall ensure that
information and items that could compromise national security,
contain confidential commercial information, or contain
proprietary information are not disclosed.
* * * * * * *
----------
FEDERAL FOOD, DRUG, AND COSMETIC ACT
* * * * * * *
CHAPTER V--DRUGS AND DEVICES
* * * * * * *
Subchapter E--General Provisions Relating to Drugs and Devices
* * * * * * *
SEC. 565A. PRIORITY REVIEW TO ENCOURAGE TREATMENTS FOR AGENTS THAT
PRESENT NATIONAL SECURITY THREATS.
(a) Definitions.--In this section:
(1) Priority review.--The term ``priority review'',
with respect to a human drug application as defined in
section 735(1), means review and action by the
Secretary on such application not later than 6 months
after receipt by the Secretary of such application, as
described in the manual of policies and procedures of
the Food and Drug Administration and goals identified
in the letters described in section 101(b) of the Food
and Drug Administration Safety and Innovation Act
(Public Law 112-144).
(2) Priority review voucher.--The term ``priority
review voucher'' means a voucher issued by the
Secretary to the sponsor of a material threat medical
countermeasure application that entitles the holder of
such voucher to priority review of a single human drug
application submitted under section 505(b)(1) of this
Act or section 351(a) of the Public Health Service Act
after the date of approval of the material threat
medical countermeasure application.
(3) Material threat medical countermeasure
application.--The term ``material threat medical
countermeasure application'' means an application
that--
(A) is a human drug application as defined in
section 735(1) to prevent, or treat harm from,
a biological, chemical, radiological, or
nuclear agent identified as a material threat
under section 319F-2(c)(2)(A)(ii) of the Public
Health Service Act;
(B) the Secretary deems eligible for priority
review;
(C) is approved after the date of enactment
of the Strengthening Public Health Emergency
Response Act of 2016; and
(D) is for a human drug, no active ingredient
(including any ester or salt of the active
ingredient) of which has been approved pursuant
to any other application under section
505(b)(1) of this Act or section 351(a) of the
Public Health Service Act.
(b) Priority Review Voucher.--
(1) In general.--The Secretary shall award a priority
review voucher to the sponsor of a material threat
medical countermeasure application upon approval by the
Secretary of such application.
(2) Transferability.--
(A) In general.--The sponsor of a material
threat medical countermeasure application that
receives a priority review voucher under this
section may transfer (including by sale) the
entitlement to such voucher to a sponsor of a
human drug for which an application under
section 505(b)(1) of this Act or section 351(a)
of the Public Health Service Act will be
submitted after the date of the approval of the
material threat medical countermeasure
application. There is no limit on the number of
times a priority review voucher may be
transferred before such voucher is used.
(B) Notification of transfer.--Each person to
whom a voucher is transferred shall notify the
Secretary of such change in ownership of the
voucher not later than 30 days after the date
of such transfer.
(3) Notification.--
(A) In general.--The sponsor of a human drug
application shall notify the Secretary not
later than 90 calendar days prior to submission
of the human drug application that is the
subject of a priority review voucher of an
intent to submit the human drug application,
including the date on which the sponsor intends
to submit the application. Such notification
shall be a legally binding commitment to pay
for the user fee to be assessed in accordance
with this section.
(B) Transfer after notice.--The sponsor of a
human drug application that provides
notification of the intent of such sponsor to
use the voucher for the human drug application
under subparagraph (A) may transfer the voucher
after such notification is provided, if such
sponsor has not yet submitted the human drug
application described in the notification.
(c) Priority Review User Fee.--
(1) In general.--The Secretary shall establish a user
fee program under which a sponsor of a human drug
application that is the subject of a priority review
voucher shall pay to the Secretary a fee determined
under paragraph (2). Such fee shall be in addition to
any fee required to be submitted by the sponsor under
chapter VII.
(2) Fee amount.--The amount of the priority review
user fee shall be determined each fiscal year by the
Secretary and based on the average cost incurred by the
agency in the review of a human drug application
subject to priority review in the previous fiscal year.
(3) Annual fee setting.--The Secretary shall
establish, before the beginning of each fiscal year
beginning after September 30, 2016, for that fiscal
year, the amount of the priority review user fee.
(4) Payment.--
(A) In general.--The priority review user fee
required by this subsection shall be due upon
the notification by a sponsor of the intent of
such sponsor to use the voucher, as specified
in subsection (b)(3)(A). All other user fees
associated with the human drug application
shall be due as required by the Secretary or
under applicable law.
(B) Complete application.--An application
described in subparagraph (A) for which the
sponsor requests the use of a priority review
voucher shall be considered incomplete if the
fee required by this subsection and all other
applicable user fees are not paid in accordance
with the Secretary's procedures for paying such
fees.
(C) No waivers, exemptions, reductions, or
refunds.--The Secretary may not grant a waiver,
exemption, reduction, or refund of any fees due
and payable under this section.
(5) Offsetting collections.--Fees collected pursuant
to this subsection for any fiscal year--
(A) shall be deposited and credited as
offsetting collections to the account providing
appropriations to the Food and Drug
Administration; and
(B) shall not be collected for any fiscal
year except to the extent provided in advance
in appropriation Acts.
(d) Notice of Issuance of Voucher and Approval of Products
Under Voucher.--The Secretary shall publish a notice in the
Federal Register and on the public website of the Food and Drug
Administration not later than 30 calendar days after the
occurrence of each of the following:
(1) The Secretary issues a priority review voucher
under this section.
(2) The Secretary approves a drug pursuant to an
application submitted under section 505(b) of this Act
or section 351(a) of the Public Health Service Act for
which the sponsor of the application used a priority
review voucher under this section.
(e) Eligibility for Other Programs.--Nothing in this section
precludes a sponsor who seeks a priority review voucher under
this section from participating in any other incentive program,
including under this Act, except that no sponsor of a material
threat medical countermeasure application may receive more than
one priority review voucher issued under any section of this
Act with respect to the drug that is the subject of such
application.
(f) Relation to Other Provisions.--The provisions of this
section shall supplement, not supplant, any other provisions of
this Act or the Public Health Service Act that encourage the
development of medical countermeasures.
(g) Medical Countermeasure Postapproval Report.--
(1) In general.--Not later than 5 years after the
date of approval of a material threat medical
countermeasure application, the sponsor of such
application shall submit a report to the Secretary on
such medical countermeasure.
(2) Contents.--A report under paragraph (1) shall
include, with respect to each of the first 2 years
after approval of such material threat medical
countermeasure application, a description of--
(A) the sponsor's activities with Federal
agencies related to the procurement, including
stockpiling, of the approved medical
countermeasure;
(B) the sponsor's progress in fulfilling
contracts entered into with Federal agencies,
including the Biomedical Advanced Research and
Development Authority, the Centers for Disease
Control and Prevention, and the Department of
Defense, related to such procurement;
(C) the extent to which the Federal
Government has fulfilled its stated medical
countermeasure requirements for the threat
intended to be treated by the approved medical
countermeasure; and
(D) the sponsor's plans, if any, to develop
additional material threat medical
countermeasures.
(3) Availability to congressional committees.--The
Secretary shall make each report submitted under this
subsection available to the Committee on Energy and
Commerce of the House of Representatives and the
Committee on Health, Education, Labor, and Pensions of
the Senate upon request by either such Committee not
later than 30 days after receipt of such request.
(4) Rule of construction.--Nothing in this subsection
shall be construed to permit the disclosure of
confidential commercial or trade secret information or
the disclosure of information that could compromise
national security.
* * * * * * *
DISSENTING VIEWS
We oppose the passage of H.R. 3299, the Strengthening
Public Health Emergency Response Act of 2015, a bill that would
make reforms to how the federal government acquires, procures,
and develops medical countermeasures (MCMs) to prevent or treat
biological threats. While this legislation attempts to address
important recommendations on our nation's biodefense
preparedness, we are concerned that it would not improve our
nation's biodefense preparedness, includes policies that will
undermine the Department of Health and Human Services' (HHS)
oversight over biodefense contracting, and would further burden
the Food and Drug Administration (FDA) by creating a new,
permanent, and unnecessary priority review voucher (PRV)
program to incentivize the development of MCMs without
addressing underlying flaws inherent in this incentive program.
I. Background
Following the September 11, 2001, terrorist attacks and the
subsequent anthrax mailings, Congress passed legislation to
address the threat of bioterrorism by increasing investments in
research and preparedness to defend against biological
weapons.\1\ Significant legislation included the Homeland
Security Act of 2002 and the Pandemic and All-Hazards
Preparedness Act (PAHPA) of 2006, which established new
departments and agencies to address preparedness and
bioterrorism response.\2\
---------------------------------------------------------------------------
\1\Congressional Research Service, Federal Efforts to Address the
Threat of Bioterrorism: Selected Issues and Options for Congress (Feb.
8, 2011) (R41123).
\2\Id.
---------------------------------------------------------------------------
Earlier this year the Subcommittee on Oversight and
Investigations heard from members of the Blue Ribbon Panel on
Biodefense and other experts about the current status of the
United States' biodefense preparedness. A report released by
the Blue Ribbon Panel on October 28, 2015, found:
The nation has not come to fully appreciate the
severity of the biological threat and our leaders have
not demonstrated the political will to fully address
it. We must address these shortcomings by prioritizing
the following areas: 1) coordination and accountability
among federal departments and agencies; 2)
collaboration between federal and non-federal
stakeholders; and 3) innovation that addresses both
lingering and novel problems.''\3\
---------------------------------------------------------------------------
\3\Bipartisan Report of the Blue Ribbon Study Panel on Biodefense,
A National Blueprint for Biodefense: Leadership and Major Reform Needed
to Optimize Efforts (Oct. 2015).
Further, the report found that the United States ``does not
afford the biological threat the same level of attention as it
does other threats.''\4\ This comprehensive review also offered
33 recommendations about how Congress and the Administration
can improve our preparedness. H.R. 3299 was introduced in
response to this report and includes provisions meant to
address these recommendations, such as: putting in place
procedures to coordinate the ongoing stockpiling of medical
countermeasures by the Biomedical Advanced Research and
Development Authority (BARDA) and the Centers for Disease
Control and Prevention; providing BARDA with direct contracting
authority; requiring a report by the Government Accountability
Office (GAO) on programs for public health emergency
preparedness; and creating a PRV program, which would award a
voucher to the sponsor of a new drug or biological product to
treat a material threat that entitles the sponsor to a six
month review of any future new drug or biological product
application of the sponsor's choosing.
---------------------------------------------------------------------------
\4\Id.
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While legislative efforts to increase our nation's
preparedness and response to biological threats have
historically enjoyed bipartisan support, H.R. 3299 fails to
address concerns raised by the Administration regarding
provisions that would limit oversight over contracting
authority and would create a burdensome incentive program
without addressing flaws in the underlying program's structure.
II. H.R. 3299: A Misguided Attempt To Reform Biodefense Contracting and
Medical Countermeasure Development
A. H.R. 3299 REVISES BARDA TRANSACTION AUTHORITIES, UNDERMINING PROGRAM
INTEGRITY
H.R. 3299 would grant BARDA the authority to directly
negotiate and enter into contracts, grants, or cooperative
agreements. The change to BARDA's contracting structure
proposed by H.R. 3299 raises concerning program integrity
issues. Currently, BARDA enters into contracts through the
Office of Acquisition, Management, Contracts, and Grants (AMCG)
and the Assistant Secretary for Preparedness and Response
(ASPR) Office, its parent organization. This structure protects
the integrity of the contracting process. The delegation of the
function to negotiate and enter into contracts, grants, and
cooperative agreements to the BARDA Director could result in
the federal government not getting the best value for taxpayer
dollars.
After Secretary Sebelius provided Congress with notice and
published the required announcement in the Federal Registrar in
2010, contracting offices were removed from BARDA and other
divisional entities within ASPR and consolidated into the AMCG
along with other ASPR-wide reorganization efforts. The
restructuring of the contract offices was done to streamline
ASPR's contracting activity, to bolster program integrity, and
to ensure that ASPR and all of its operating divisions conduct
their business without either the perception or potentially the
reality of undue influence by program officials. The
restructuring also allowed the AMCG to get Head of Contracting
Activity (HCA)--an authority that allows a contracting office
to be a self-fulfilling, self-managed contracting office. This
designation removed the need for the contracting office to go
through an additional layer of approval at the departmental
level before a contract could be completed. The current
structure, which is consistent with procurement practices
across the federal government, ensures the right balance
between expert scientists that advance our national
preparedness and expert contracting professionals that ensure
the government is getting the best value for every taxpayer
dollar.
The integrity-minded structure established by the ASPR in
2010 has not only contributed to a steadily improved
contracting process but also one that has successfully
withstood the few protests presented to the organization. The
existence of undue influence could potentially compel a
contracting officer to do something unethical or illegal at the
direction of the BARDA director because they worry that the
BARDA director, who would ultimately control their performance
appraisal and promotions, might take adverse action against
them. Overpaying for the research and development of medical
countermeasures or for some products could limit our ability to
enter into advanced development and procurement contracts for
new medical countermeasures since only finite resources are
available. This could weaken our preparedness for public health
emergencies and protection against terrorist attacks by
limiting the number of medical countermeasures we have in the
pipeline to respond to chemical, biological, radiological, and
nuclear (CBRN) threats as well as other public health threats.
1. Potentially Slows Down the Contracting Process
The changes proposed by H.R. 3299 could result in the
contracting office losing its HCA designation, which would be
consistent with the operation of the contracting office prior
to its placement under ASPR. Since the reorganization of ASPR,
which consolidated organization-wide contracting activities in
the AMCG Office at ASPR, BARDA has experienced an acceleration
in the delivery of medical countermeasures. For example, of the
total 23 products that BARDA has supported that received FDA
approval, licensure, or clearance, 14 of those approvals have
occurred since 2011 and five have occurred in the last 16
months. BARDA is also currently supporting a pipeline of over
100 more.
If the contracting office loses that designation, BARDA
contracts could be forced to go through an additional layer of
approval at the department level that is not required by the
current structure. As a result, the pace at which BARDA
completes contracts is likely to slow down. This would be
counter to the stated goals of this change and harm our ability
to accelerate medical countermeasure development.
B. H.R. 3299 EXTENDS AN UNNECESSARY, UNPROVEN, AND INHERENTLY FLAWED
INCENTIVE TO MEDICAL COUNTERMEASURES
As passed by the Committee, H.R. 3299 creates a new
standalone and permanent PRV program for MCMs. The new
permanent MCM PRV program would require FDA to review within
six months any human drug application that is: (1) approved to
prevent or treat harm from a material threat listed in section
319F-2(c)(2)(A)(ii) of the Public Health Service Act; (2)
eligible for priority review; (3) approved after the date of
enactment of H.R. 3299; and, (4) includes no active ingredient
previously approved by FDA.\5\ If FDA approves such an
application, the agency must award the sponsor a PRV which
entitles its holder to a second six-month priority review of
any other human drug application (the standard drug review time
is ten months). A company awarded a PRV can redeem the voucher
for expedited review of its own product, or transfer or sell
the PRV to another company. The only requirement is that a
company redeeming a PRV must provide FDA with 90 days advanced
notice of its intent to redeem and pay FDA a priority review
user fee to help offset the costly and resource-intensive
priority review. The creation of this incentive is meant to
spur continued and future development of MCMs.
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\5\H.R. 3299, Section 7.
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1. Existing Authorities and Incentives Sufficient to Encourage MCM
Development
While MCMs play an important role in our national security,
H.R. 3299 extends an unnecessary incentive to drug companies.
Companies that produce MCMs often receive significant federal
support throughout the drug research and development, approval,
and procurement process. A 2014 Congressional Research Service
(CRS) report stated that, since 2004, the federal government
has spent over $3 billion procuring MCMs.\6\ Further, in
addition to the billions spent post-approval by the government
to purchase these products for stockpiling, lucrative federal
contracts often support research and development of these
drugs.\7\
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\6\Congressional Research Service, The Project BioShield Act:
Issues for the 113th Congress (June 18, 2014) (R43607).
\7\For example, in the 2015 President's Budget, HHS reported it
would spend over $830 million during the 2015 fiscal year to support
medical countermeasure research, development, and procurement through
BARDA and Project BioShield. Department of Health and Human Services,
FY2015 Budget in Brief, (June 4, 2014) (www.hhs.gov/about/budget/
fy2015/budget-in-brief/phssef/index.html#).
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FDA also devotes significant taxpayer funded resources to
assist MCM sponsors throughout the drug development and
approval process. For example, in fiscal year 2015 alone, FDA
held 84 formal meetings with MCM developers or applicants to
provide technical assistance or clarify regulatory
requirements.\8\ Since 2000, FDA has approved 89 medical
countermeasures, 17 supplemental changes to already approved
applications, and 71 modifications to diagnostic devices.\9\
Drug companies developing MCMs also often utilize existing
government research and develop and produce MCMs in government-
funded research facilities and production
sites.10,11 The large number of approved MCMs and
strong regulatory support demonstrate that sufficient
incentives currently exist for investments in MCM development.
Providing an additional incentive of a PRV, the last of which
sold for $350 million, is unnecessary and will amount to a
windfall for many drug companies at the expense of American
taxpayers.
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\8\House Committee on Energy and Commerce, Testimony of Michael
Mair, Director of Strategic Operations, Food and Drug Administration,
Hearing on Examining H.R. 3299, Strengthening Public Health Response
Act, 114th Cong. (May 19, 2016)
\9\Id.
\10\Department of Health and Human Services, Department Of Health
And Human Services' Centers for Innovation in Advanced Development and
Manufacturing (HHS-CIADM) (www.medicalcountermeasures.gov/barda/core-
services/ciadm.aspx).
\11\Nanotherapeutics Celebrates Groundbreaking of its Advanced
Development and Manufacturing Center (NANO-ADM) in Copeland Park,
Alachua, FL, Business Wire (Oct. 23, 2013) (www.businesswire.com/news/
home/20131023005120/en/Nanotherapeutics-Celebrates-Groundbreaking-
Advanced-Development-Manufacturing-Center).
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2. Lack of Evidence PRV Programs Work
It is unclear if existing PRV programs are having the
intended effect of incentivizing investment in new research and
development of drugs. At the May 19, 2016 Subcommittee on
Health hearing on H.R. 3299, FDA testified that, to date, there
is no evidence that the two existing PRV programs (rare
pediatric diseases and neglected tropical diseases) are
incentivizing new research and drug development, or benefiting
those Congress intended.\12\ For example, of the three PRVs
awarded under the tropical disease PRV program, two were
awarded to drugs that had been used for years outside the
United States. One drug was approved in over 80 countries
before the sponsor filed an application with FDA--an
application that included only studies conducted before 2007 to
obtain approval outside the United States.\13\ The second drug
was registered outside the United States for over a decade
before an application was filed with FDA and the filed
application only included studies conducted by a company that
previously owned the drug.\14\ However, under the terms of the
program, FDA was forced to award two PRVs--one to a company
that conducted no new research, and one to a company that
conducted no research at all. Further, in the tropical disease
PRV program, people afflicted with the disease have been unable
to access approved drugs because, unlike the rare pediatric PRV
program, there is no requirement that a sponsor market its drug
after receiving the valuable PRV award in the tropical disease
context. The underlying problems identified in the tropical
disease PRV program have not been addressed in the creation of
the MCM PRV program in H.R. 3299. H.R. 3299 does not limit a
PRV award only to companies that invest in new drug research
and development, and does not require a company that receives a
PRV to produce and make the MCM available to the U.S.
government for stockpiling purposes.
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\12\House Committee on Energy and Commerce, Testimony of Michael
Mair, Director of Strategic Operations, Food and Drug Administration,
Hearing on Examining H.R. 3299, Strengthening Public Health Response
Act, 114th Cong. (May 19, 2016)
\13\Tatum Anderson, Novartis Under Fire for Accepting New Reward
for Old Drug, Lancet (Apr. 25, 2009).
\14\Aaron S. Kesselheim et al., Experience With the Priority Review
Voucher Program for Drug Development, JAMA (Oct. 27, 2015)
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3. Proposed New PRV Program Does Not Meaningfully Limit Eligibility
Under H.R. 3299, FDA must approve a new drug application
(NDA) for a drug to treat a material threat that: (1) qualifies
for a six-month priority review;\15\ (2) is approved after the
date of enactment; and (3) contains no active ingredient
previously approved by FDA. If the sponsor's NDA meets these
qualifications and is approved by FDA, the sponsor is then
eligible for a PRV. The program created in the H.R. 3299 AINS
does not preclude PRV awards to drug companies:
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\15\There is a set criteria FDA must adhere to when designating a
drug as eligible for priority review and this should not be viewed as
giving FDA significant discretion in determining PRV eligibility. To
qualify for priority review, a drug must treat a serious condition
(e.g., a material threat) and demonstrate only potential to be a
significant improvement in safety or effectiveness. After receiving a
request for a priority review designation, FDA only has 60 days to make
this determination.
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With drug applications currently under
review at FDA;
That previously received approval of the MCM
outside the United States; and,
That are developing drugs that do not
fulfill an existing federal government need (e.g.,
developing drugs for which there is an existing
treatment in the strategic national stockpile).
Without appropriate safeguards, it is unclear that H.R.
3299 would appropriately award PRVs to new MCMs that are needed
by the federal government, and could instead further flood the
market with PRVs for products that may not be novel or
necessary from a national preparedness perspective. This could
have the unintended consequence of reducing the value of PRVs
overall and thereby disincentivize development of new drugs
under all PRV programs.
4. Creation of a New PRV Program Could Undermine FDA's Drug Review
Process and Public Health Mission
Generally, FDA will grant a six-month priority review to
drug applications that have potential to improve public health,
such as a drug that will address an unmet medical need.
However, PRVs awarded under the tropical and rare pediatric
disease programs can be used to expedite review of a drug
application that otherwise would not qualify. PRV programs
essentially allow a drug sponsor to purchase a priority review
at the expense of other public health priorities. Increasing
the burden on FDA to expedite review of more applications with
limited public health value undermines FDA's ability to fulfill
its mission, manage its drug review workload, and threatens
staff morale.
FDA drug product reviewers are organized into divisions
that specialize in reviewing specific drug classes. Drug
reviewers cannot be ``reassigned'' to assist another division
in reviewing an application submitted for expedited review
(e.g., a reviewer trained to review oncology drugs cannot be
reassigned to help expedite review of a weight loss drug
submitted with a PRV). A drug company utilizing a PRV must only
provide FDA with 90 days' notice before submitting the new drug
application for priority review, preventing FDA from hiring and
training staff necessary to expedite review of applications
submitted with a PRV. As a result, when a company redeems a
PRV, FDA must divert resources from existing work to expedite
review of a drug that may, under normal circumstances, be a
lower priority. In addition, a new drug application that
qualifies for the standard ten-month review generally is
supported by large data sets that take FDA reviewers
significant time to evaluate. When such an application is
submitted with a PRV, it places a significant strain on FDA
resources by reducing the time an FDA reviewer has to perform
important work from ten to six months.
Some supporters of the new PRV program included in H.R.
3299 have suggested that this incentive comes at no cost to the
taxpayer. However, expediting review of new drug applications
that would not ordinarily qualify for priority review, places
an enormous strain on FDA's resources. This costs taxpayers
money since it is tax dollars that fund this additional work.
Additionally, it costs the American public when access to new
drugs is delayed because a drug company ``skipped the line''
with a PRV and delayed FDA approval of other important drugs.
5. Expanding Eligibility for PRVs to MCMs May Diminish the Value for
Tropical Disease and Rare Pediatric PRVs
David Ridley, the architect of the PRV program, cautioned
against expanding the program to include MCMs. In a letter
submitted for the record at the May 19, 2016, hearing on H.R.
3299, Mr. Ridley stated that such expansion could reduce the
value of a PRV, as increasing the number of available PRVs
would sharply decrease the expected price. This would make a
PRV not only an ineffective incentive to develop MCMs, but also
have the unintended consequence of disincentivizing development
of drugs to treat rare pediatric and neglected tropical
diseases as well. Mr. Ridley stated:
Viewed in isolation, it makes perfect sense to add
medical countermeasures to the diseases eligible for
priority review vouchers. However, members of Congress
should be aware that adding voucher-eligible diseases
will drive down the price of vouchers and thus drive
down the incentive to develop treatments for diseases
already on the list. In the current issue of Health
Affairs, my coauthor and I estimated that if one
voucher is available in a year, it will be worth more
than $200 million, but if four vouchers are available,
then the price could fall below $100 million (Ridley
and Regnier 2006). If voucher prices fall below $100
million, then the expected net present value of the
voucher would fall below the typical cost of a Phase
III clinical trial and FDA submission. Hence, the
voucher would not provide sufficient incentive for drug
development and additional incentives would be needed .
. .\16\
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\16\Letter from Dr. David Ridley, Ph.D, Faculty Director, Health
Sector Management, Duke University Fuqua School of Business, to Rep.
Frank Pallone, Jr. and Rep. Gene Green, House Committee on Energy and
Commerce (May 17, 2016).
Devaluation of a PRV can reduce the program's effectiveness
by undermining incentives to develop new medicines for tropical
or rare pediatric diseases.\17\
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\17\David B. Ridley and Stephane A. Regnier, The Commercial Market
For Priority Review Vouchers, Health Affairs (May 1, 2016)
(content.healthaffairs.org/content/35/5/776.full).
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6. The Unjustified and Unnecessary MCM PRV Program Would Be Permanent
In other important areas, such as incentivizing development
of drugs to help children, Congress thought it important to
include a sunset date to allow for an opportunity to assess a
program's impacts and determine if reauthorization is in the
best interest of the American public. For example, the rare
pediatric disease PRV program, the Best Pharmaceuticals for
Children Act (BPCA), and the Pediatric Research Equity Act
(PREA) included initial sunset dates so that we, as members of
Congress, could determine if the legislation we enacted was
working as intended. Both BPCA and PREA were later enacted on a
permanent basis; however, this was only after Congress had the
opportunity to assess if the program's benefits outweighed its
costs.\18\
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\18\BPCA was enacted in 1997, and PREA was enacted in 2003. Both
programs were made permanent as a part of the Food and Drug
Administration Safety and Innovation Act in 2012.
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There is no sunset in the MCM PRV program that would give
Congress a similar opportunity to determine if the program is
effective or working as intended. It is important to note that
there has been only one study of existing priority review
programs, which focused narrowly on one PRV program. In this
study, the Government Accountability Office found a lack of
evidence demonstrating that the rare pediatric disease program
was incentivizing new investment in drug research and
development. As there is no existing evidence--other than
anecdotes from those that stand to gain from PRV programs--
demonstrating that such programs are having the effect that
Congress intended, it is unwise to create a new and permanent
program for MCMs.
Frank Pallone, Jr.,
Ranking Member.
Gene Green,
Ranking Member, Subcommittee
on Health.